Out of 18,000 real estate developers, at least 16,000 of them have reportedly packed up their businesses in posh localities and have flown to other countries of the world to explore new investment opportunities. A journey of investment which started over a decade ago with real estate bubble has turned into a real estate disaster. There is no doubt the government is correct from all aspects on the issue of documentation of the economy, but incorrect when it is trying to use a blunt tool to fix the ailing machinery. The economy of the country is growing, but it is not ready to deviate from the traditional path and the government is not ready to wait and gradually shape and reshape it according to the situation. The botched actions by the policymakers make a mess of everything under their control and the real estate sector is the latest casualty of their misadventure.
Reports suggest that the government has taken a U-turn on the valuation of property rules, but it could not remove slump in transactions. The real estate sector is doomed as investors have flown abroad and the rest of the investors have adopted a wait and see policy. The brand names in the sector are also facing serious issues, eroding the interest of the short-term investors. The government has reportedly made a modest increase in the property tax. The government has devolved the powers in the Federal Bureau of Revenue to assess the land prices and stop under-valuation which was a matter of routine in the real estate sector. The realtors and common buyers are taking cautious approach in selling and buying. However, the business has shown a modest growth in the residential areas of mid and low income groups. Some experts believe the land is overprices in some areas and powers devolved to the board will further bring slump in the business.
The real estate sector can act as an engine of growth for the country’s economy and is the best area to contain black money in the country. The government still lacks ability to control capital flight which is allegedly going on at mass scale. The real estate market is on the verge of nervous breakdown keeping in view the official routine in the country. People do not want to enlist themselves in any activity which gives the FBR an opportunity to reach their bank accounts. This is the level of trust deficit between the government and the people in the country. Unless the government works for the capacity building of the officials, the situation will continue to go from bad to worse.
