Role of Real Estate Sector in Pakistan’s Economic Growth

Pakistan is one of the world’s most famous countries, with almost 200 million people making it their home. But unfortunately in terms of infrastructure and the economy, despite progress, millions of people are still either homeless or living in temporary shelters or ‘Katchi abadis’. This whole scenario gives us a clear picture that how much there is a need to develop Pakistan’s real estate sector so that it can fulfill the demands of housing for people of all income groups.

Here we will discuss Pakistan’s real estate situation and also the importance of the real estate sector in Pakistan’s economic growth.

Importance of Real Estate in Pakistan’s Economic Growth

Real estate is one of the most important driving factors in the economic growth of Pakistan. It is considered the largest segment of Pakistan’s Economy. Real estate is a real property that consists of land and anything permanently attached to it. The property can be a house, building, shop, plaza, etc.

Real estate is a very broad domain that revolves around not only property dealings but also purchasing houses, construction, retailing, hoteling, and renting of spaces for business and personal purposes. The real estate industry is a fantastic way to build up and strengthen the economic growth of Pakistan. Because it binds with other cooperating industries in the construction process.

Real estate remains the backbone of the country’s economy with more than 2000 industries intertwined with real estate. By examining the performance of these industries, we observe that the construction and housing sectors contribute more than 9 percent to the country‘s GDP.

In past years the government did not pay attention to establishing a proper regulatory framework and also did not work towards improving the real estate sector to enhance its positive impact on the economy and overall GDP. Moreover, this led to facing obstacles to growing and reaching its potential. The sector has gained importance in recent years. Data relating to the real sector is not easily available because housing and construction are considering as separate sectors under the NAF.

Consequences of CPEC on Economic Growth

The China-Pakistan Economic Corridor (CPEC) is another enormous growth initiative that will change Pakistan’s economy and as a result, the real estate market grows in the coming years. CPEC project left a positive impact on the economic growth of Pakistan. Multan is now being authorized as Pakistan’s next economic center by businesses and investors. The development of DHA Multan and DHA Bahawalpur are the two biggest examples of how CPEC affects the real estate industry of Pakistan.

How does CPEC Boost Pakistan Economy?

The Impacts of CPEC on Pakistan’s economy is very immense such as:

  • Several industries are established in Gwadar
  • There has been significant growth in the number of job openings
  • 07 percent growth rate increases

Undoubtedly the real estate industry will expand in the coming years. However, there are several hurdles to the real estate sector development in Pakistan.

Challenges in Real Estate Market

The majority of overseas Pakistani complain about the transparency in Pakistan. Land possession is another major challenge in the real estate market of Pakistan. Moreover, the solutions to these problems are easily available. Pakistan should look towards the developed world for adopting the competent planning practices that will help us to stand in the real sector. For instance, the United Kingdom launched an online land registry system in 2000 through digital mapping of its land. So, a land registry system is vital in Pakistan as stumbling 60 percent of court cases are real estate with 80 percent of these cases belonging to disputed ownership.

The delivery of projects ensures on time by making this process easier for the developers. Therefore, the regulatory authority is require to implement these reforms. For regulation, a Real Estate Regulatory Authority must be implemented in its true spirit and form. This authority must regulate the developers or real estate agents and help them with the problems that arise in the property sector. Opening a one-window operating system including physical and online can be a motivating step. Negligence occurs because real estate agents don’t have a license or do not follow the defined standards. Countries like the United Kingdom, Dubai, and India have already implemented the RERA in their real sector for better practices. By the RERA implementation, and providing access to the information through online tools, by implementing national-level techniques, the challenges in the real estate sector can be solved.

Excessive Regulations of the Government

The FBR firm regulations like the ban on non-filers, and high property transfer taxes discourage many investors in the market. Even though stock marketers are volatile, it is not the economic predictor you would expect. However, a common misinterpretation of real estate as an investment opportunity is that it makes a lot of money. This is not the case. The Property industry fills the void in most countries where capital markets do not play a significant role in economic development. Due to excessive regulation of FBR, unfortunately, this sector is unable to do so.

Potential of Real Estate in Pakistan

Digitize the Real Estate Data

The Pakistan real estate sector has come under the public eye due to the government realizing and trying to improve the industry. Also trying to bring it to local foreign real estate investments. The biggest challenge that most investors faced while considering the investing in property sector is the lack of exposure and reliable information, which tends to turn people away. The government launches the initiatives to digitalize the real estate data for accountability and transparency purpose that gives confidence to investors in their investments.

Local and Foreign Investments

Instead of choosing to run a business, overseas Pakistanis often invest in real estate. The sector is positioned for rapid growth in the upcoming years because of rising investments and remittance payments.

On the other hand, most of the investors show interest in premium housing societies and secure living areas. The gated community’s concept increases as it provides all the basic and modern amenities. To attract investors and develop the interest of people, property developers are focusing on their investments and efforts to provide the best construction services. Such projects boost the construction, and housing efforts for the growing population and vitalize the buying and selling of land in Pakistan.

Providing budget-friendly housing

Pakistan has been constantly facing the issue of providing shelter to the poor. The government realizes that this problem cannot be solved without the cooperation of real estate developers and investors. These major parties in the real estate sector play a significant role in making it possible to introduce budget-friendly or affordable housing societies for the citizens of Pakistan.


On the whole, the effect of real estate on Pakistan’s economy may be low at present. But Pakistan’s Real estate industry has the potential to grow by opening up massive employment opportunities and supporting the economy in the upcoming years. Improve tourism and foreign relationships will lead to improved performance and contribution to the sector. Also, help in bringing in more investments and revenue for the government. Pakistan should devise a plan to resolve the issues that developers and consumers are facing in the real estate industry. That’s all in the blog `Role of Real Estate Sector in Pakistan’s Economy.

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