The introduction of the Real Estate Planning and Development Act in 2021 has led to an increase in the Real Estate market. This act is aimed at improving the housing facilities and projects in urban areas in order to meet the increasing needs of the people. The Act states that local governments are responsible for providing suitable accommodation to the people living in the urban areas and they can also decide as per their requirements regarding the construction and design of residential, commercial, institutional or industrial projects. In order to cater to the increasing demand for property in urban areas the government has approved a number of projects in various cities.
One of the biggest projects approved by the government is the $2 billion dollar high rise skyscrapers project in Karachi. With the assistance of the Chinese investors this mega project has been executed on the basis of the Real Estate Planning and Development Act and the project’s supervisor has assured full co-operation from the local government. This has resulted in the growth of the real estate industry in Karachi.
Another upcoming project in Karachi is the mega housing and commercial project in Rawal Port. The name of the project is ‘Sheikhleys’ and it is being planned by the QA and CPV industries. It is expected to provide accommodation to around 2021 people and will be developed under the management of a Chinese firm. There are also other large projects coming up in and around the cities like Hyderabad, Lahore, Multan, Islamabad and others.
The main concern of the government is how to deal with the increased demand of properties? How to increase the supply and reduce the demand. They have not been able to do so to the satisfaction of their expectation and this has led to the increase in prices. The Planning Ministry has taken a couple of steps that can reduce the pressure on the market. They have revised the regulations for planning permission, cleared the way for foreign investment in certain areas and introduced a new law on foreign investment.
However, these initiatives have not reduced the demand for property at an alarming rate. A survey was conducted recently by the National Association of Home Builders to find out if the increasing demand for homes in the city was affecting the construction of new projects. The survey found that there was an increase in the number of houses constructed in 2021 to meet the growing demand, but the number of jobs lost in the process was startling. This means that even though the job market is doing fine, there is no movement in the direction of reducing the number of homes built every year. If more work is required, then it has to be outsourced, which leads to inflation.
The situation is obviously not good for the Pakistani real estate sector. There are no major cities that have run out of space. The increasing population will mean increased demand for housing. If you have any plans to invest in properties in any of these cities, then you should hurry up because supply is not expected to meet the increasing demand.
