Is there any hope that the property prices will return to normal in coming days is big question facing the real estate sector nowadays. The real estate market was plunged into recession after the government introduced withholding and capital gain taxes in the federal budget on the sale and purchase of land in major cities of the country. The real estate had emerged as the most lucrative business in the country and it had become the driving force for the industrial growth. From steel, woodwork, bricks, cement, electricity gadgets to dozens of other essential items are part of the construction sector. However, the government action knocked down not only the property prices but also the whole of the housing industry. Instead of increasing the government revenue, the near collapse situation of the real estate and housing sectors has squeezed the revenue collections. The sale of land has almost come to a grinding halt in the newly developed housing societies and the country has gone several steps back.
The stakeholders have started to invest money in Dubai and Kuala Lumpur, putting the property business on hold. The newly imposed taxes have not only reduced the prices in posh localities of Lahore, but sale and purchase of land has almost stopped. The government’s quest for additional revenues has pushed the economy into chaos. The government is still expecting the nation to believe in false promises that good days are ahead for business, investment and prosperity. Only two years are left for the present setup to stay in the office but no visible change has been seen in the economy. The government is running from one lending agency to another to maintain the foreign exchange reserve at certain level and is banking all its economic and financial policies on loans and foreign remittances. The office of the government is a responsibility rather than recreation. The nation has elected this government to power and is expecting it to deliver.
As the population of the country is increasing at a fast rate, the country needs new housing projects. But instead of facilitating and encouraging the real estate and housing sectors, the government is creating one trouble after another pushing the business community to the wall. If the local investors are not happy with government policies, how it will convince the foreign investors to put their money at stake in a country where the government is ever ready to change its laws. Earlier, the government had imposed 0.6 percent withholding tax on banking transactions, which almost collapsed the banking industry. Now no one knows where the taxes on the real estate will lead the country.
