BE2C2 Report— Pakistan’s real estate market is worth $700 billion in present value as the country’s realty has yielded medium-term returns of up to 300 per cent in recent years due to rapidly growing investment interest by overseas Pakistanis and foreign investors.
This was stated by Moazzam Ahmed Khan, Pakistan Ambassador to the UAE, during an exclusive interview with The Gulf Today at the recently concluded Pakistan Property Show in Dubai– it recorded an unprecedented attendance of about 14,000 visitors over the two days which is a record for any exclusive Pakistani Property Show anywhere in the world.
The event also reportedly attracted a galaxy of government and diplomatic dignitaries, community and business leaders and celebrities in the Emirates.
The Ambassador highlighted a huge potential in country’s real estate sector. He suggested the overseas Pakistanis and foreign investors to increase investment in the burgeoning property sector of Pakistan to reap its benefits despite global financial trends.
Overseas Pakistanis form the second largest community in the UAE with an estimated 1.5 million strong presence. Overseas Pakistanis in the UAE contributed 22.367% to the overall worker remittances in the fiscal year 2016-17 which amounts to $4.33 billion– still a moderately high disposal income figure by international standards with potential for more.
Number-wise, 20 million housing units are needed in Pakistan by 2025, according to an estimate which does not account for the impact of $62 billion China Pakistan Economic Corridor on real estate demand and supply. The investment scenario therefore looks positive according to market analysts.
Most Pakistani expats– even Pakistanis, purchase property on cash basis due to lack of access or knowledge of mortgage facility. One of the main bottlenecks is the underdeveloped mortgage sector itself—just 0.5 percent of GDP compared to the Rs 12 trillion mortgage market in India—10 percent of GDP. With a more accessible home loan market, many more Pakistani people and Pakistani expats could find the capital for their first time home or investment property, say experts.
A World Bank report noted that the housing to finance ratio in Pakistan was one of the world’s lowest at just one percent compared to 50 percent in developed nations. Notwithstanding, the enabling environment for growth has stabilized. The improving security situation was picked up by the Wall Street Journal who described Pakistan as a ‘pleasant surprise,’ and The Economist noted that the country is ‘experiencing a rare period of optimism’.
Analysts are hopeful that as the home loan market progresses further this will act as a fillip to the real estate sector.
Ahmed Shaikhani, President, Pakistan Business Council, also mentioned that the upswing in the Pakistan’s property market is expected to continue in the months and years to come due to world-class developments increasingly attracting overseas Pakistanis to invest and own property back home.
He noted that the land prices in Pakistan are relatively cheap compared to other countries of the region, adding that capital investment is rapidly increasing in the country.
Shaikhani stated that The Pakistan Business Council is actively cooperating with the organizers in order to make the show one of the most successful events in the world. Pakistanis worldwide are estimated to be almost 9 million with access to high percentage of disposal income and credit facilities.
The show exhibited a broad spectrum of properties including residential and commercial offers from across Pakistan. A bouquet of around 50 real estate developers and agencies brought forth their best offerings suited to the variety-full needs of the overseas Pakistani community.
Properties from Peshawar, Islamabad, Lahore, Faisalabad, Sargodha, Karachi, Gwadar and places in between were brought to the doorsteps of the overseas Pakistani community in the UAE. Overseas Pakistanis with varying preferences and budget ranges were able to find something to their liking at the show.