How to Start a Real Estate Business In Pakistan in 2024?

Ibn-e-Ameer

Investment in the real estate sector has higher returns as well as higher risk due to the monopoly of real estate tycoons.

The real estate sector operates like investing in the stock market to some extent with better returns and higher risks.

And if you are overseas and have some surplus money, you will be looking around to invest in real estate.

There is no quick cash if you invest in the real estate sector. However, if you can find out reliable real estate project and make an investment, you will be able to make money in the long run.

If you compare real estate with investment in the stock market, then Pakistan’s real estate industry may be the better option for you especially if you have earned money from abroad and want to invest in Pakistan in a reliable project!

Let’s dive further to learn about the real estate business and the potential of investment in this sector.

Real Estate Business in Pakistan in 2024

Whether residing in Pakistan or elsewhere, owning a home is a universal desire that transcends financial status.

If you are looking to invest in the real estate sector in 2024, it is a lucrative business in Pakistan.

As the prices of real estate in Pakistan are down due to the economic slump, therefore if you have money, this may be a better time for you to make a secure investment.

The key reasons are higher inflation, energy prices, and high-interest rates that have pushed prices down in Pakistan in 2024.

Unfortunately, industry tycoons have taken undue advantage of the real estate market situation and are making incredible profits, even surpassing that of heroin smugglers.

These influential figures hold significant power over government policies and tout the industry’s abundant employment opportunities.

As a response, the government has offered tax breaks and amnesty to incentivize real estate investment.

As seen in the United Arab Emirates, real estate has the potential to greatly impact a country’s economy.”

Key Takeaways

Pakistanis value property ownership, and the real estate industry offers low-risk profit.

Pakistan’s real estate sector is dominated by long-time tycoons.

Government incentives and protections stimulate real estate investment.

The real estate industry’s future is bright because Pakistan has a housing crisis and many Pakistanis abroad want to buy property there.

Online real estate websites assist Pakistanis buy and sell homes.

Reading books, talking to real estate agents, and using social media can help beginners in real estate.

You’ll need investors and new housing projects to become a Pakistani real estate millionaire.

Websites and social media can promote your business and attract investors.

What is Real Estate Business?

Real Estate has become a gold mine for mighty investors in Pakistan with high returns and higher risk.

There are two lucrative sectors to offer high incentives-one is the stock market and the other is real estate.

However, you can start a business in Pakistan by conducting due diligence. These sectors offer high risk and high returns.

If you are in the stock market business, it is like gambling and you may lose money.

The same case is with real estate if you have no proper strategies and due diligence, you may also lose everything due to fraud involved in these two sectors.

Future of Real Estate Business in Pakistan

The future of the real estate business in Pakistan has always been bright because business tycoons have been in this business for decades.

This is why this sector offers incentives and protection to those who want to start a real estate business in Pakistan.

There are top Real estate names in Pakistan like Malik Riaz, Arif Habib, AKD, and even DHA.

These real estate tycoons have monopoly and domination in the real estate market.

So, they have control over the prices of land, and lack of competition results in an artificial boom in prices due to the dominance of these actors.

However, the economic conditions of Pakistan are bad at present and Pakistan is following the dictations of the International Monetary Fund (IMF) to avail of the loan.

But Pakistan has an informal and cash economy and therefore people have a lot of money to invest in real estate.

Moreover, a large community of Pakistanis is living abroad and they are sending multimillion dollars every month on account of remittances.

Therefore, the first dream of Pakistanis living abroad is to buy their own home in Pakistan whenever they have handsome cash.

State Bank of Pakistan (SBP) had reported that the country was still facing a shortage of 12 housing units.

Therefore, the scope of the real estate business in Pakistan never ends.

Real estate business in Pakistan 2020

Pakistan faced a wave of covid-19 that also hit all sectors of the economy due to lockdowns.

Prime Minister Imran Khan accounted big relief package for the construction industry on April 3, 2020, due to Covid 19. The purpose was to maintain construction activity in the real estate sector.

In addition, the government had provided Rs30 billion (subsidy) to the Naya Pakistan Housing Authority. This also helped boost activity in the real estate sector.

Real Estate Business in Pakistan 2021

The government had announced tax adjustments, the mortgage finance facility, and amnesty schemes. However, builders say that it could not yield the desired results due to the lack of their implementations in true letter and spirit.

Despite this, the activity in the real estate sector witnessed a boom in 2021. However, it remained below the market expectations as the coal prices soared in the international market.

They also caused a hike in the price of building materials like cement and steel.

The government had also announced low-cost housing projects but they also faced a blow due to high prices of construction material. The upward revision in land valuations by FBR was another blow to construction activities in 2021.

Online real estate business in Pakistan

The online real estate business in Pakistan has also gained momentum with the revolution of Information Technology (IT).

Different eCommerce websites are involved in the real estate business to provide online services to Pakistanis.

It was also a great source of help for those living abroad as they could get firsthand information about buying and selling properties. Several real estate websites in Pakistan are helping customers to buy and sell the property.

Top Property Websites in Pakistan

Real Estate Business in Pakistan for Beginners

We have discussed the current situation of the real estate industry and the investment potential.

Now, we will discuss how to start a real estate business as a beginner if you have no money.

Before taking a practical step, you have several platforms like Facebook, Google, Twitter, and YouTube Channel.

You should start learning about the real estate business and the skills required to become successful in this venture.

Prepare a work schedule to learn about it on social media platforms.

However, you can also learn by reading books.

How to Become a Real Estate Agent or Broker

Before you are in to become a real estate agent, spend time with some real estate brokers to learn skills.

This will be a good start. After you have achieved enough skill, then set up your own office to start a business in real estate.

Several examples started businesses like real estate agents and became millionaires in the real estate industry in Pakistan.

Therefore, you can start work as a middleman to strike ‘buying and selling deals’ for your home.

With time, you will also start investing in small-scale housing societies which are at the beginning of development.

Joint Ventures with Investors in Real Estate

joint ventures in real estate in Pakistan

When you have an expert in the real estate business, then start exploring opportunities for joint ventures with investors.

It will be a win-win situation for both of you.

Read More:

You can kick off work on developing an independent society.

There will be a point where you will start a journey of becoming a millionaire in the real estate business in Pakistan.

Start Online Website

Now, you have skills and money. Therefore, it is an opportunity for you to adapt to new skills and techniques of marketing to attract investors.

You can start your website or YouTube channel on real estate where you can tell customers about new developments.

It will help develop relations with your customers.

This will not boost your business but these digital tools may become a source of handsome income for you.

Boost Your Real Estate Business on Social Media

Social Media platforms like Facebook, Instagram, and Twitter have become strong tools to market products.

You can also use these tools to increase the outreach of your business.

boost real estate business on social media

They also offer the opportunity to promote your business through paid advertisements.

Developed countries are using these tools to make money in different businesses. We are using them to chat and waste time. Then, why you should not use them to boost your real estate business in Pakistan?

Govt relaxes rules for housing finance

The government has relaxed the rules for housing finance even further, allowing individual buyers to obtain loans for residential units in under-construction projects.

The central bank said in a notification issued on Friday that “To further facilitate buyers of housing units in under-construction projects, the requirement of the builder/developer to obtain construction financing is being relaxed.”

As a result, buyers of homes in developing projects may obtain housing finance against their units in the scheme where the builder or developer has not obtained construction financing.”

In such cases, the builder or developer would be obligated to create a mortgage charge over the project’s land in the name of a bank or development financial institution (DFI) through an agreement.

“The charge will be vacated only after the project is completed and the housing units are transferred to the purchasers.”

A purchaser of a housing unit in a development project can obtain housing finance from any bank or development finance institution.

If the purchaser wishes to obtain financing from a bank or DFI other than the mortgagee institution, he must obtain a no-objection certificate” (NOC) from the mortgagee bank/DFI.

Furthermore, the bank/DFI that finances such purchasers would be required to enter into a bilateral agreement with the mortgagee bank/DFI to secure its risk.

Concerning the requirement for informed consent, “it is clarified that the builder/developer will be responsible for arranging written consent from customers who intend to purchase housing units from their sources without availing mortgage finance.”

“The builder or developer will submit the letters of written consent of such purchasers to the bank/ DFI in the original.”

Previously, the central bank directed commercial banks to increase the minimum amount of housing loans to 7% of total disbursements to the private sector by 2022. Before this, banks were given 18 months to disburse a total of 5% for the fiscal year ending December 31, 2021.

Banks approved a total of Rs 355.9 billion in 2021, including Rs 38 billion for low-cost housing schemes.

Pakistan faces a shortage of 12 million units

According to estimates, Pakistan is facing a housing shortage of around 12 million units as demand for homes remains high in comparison to supply.

People were unable to purchase housing units due to a lack of financing options.

The current government is taking steps to increase the availability of credit by subsidizing it, particularly for residential units costing up to Rs 6 million.

In the middle of February 2022, the government relaxed rules for obtaining housing finance for low-cost units worth Rs 3 million.

The government reduced the markup rate, increased the subsidy payment, and increased the loan repayment period to 15 years from 10 years previously.

A boom in the real estate market

The boom in the real estate sector has been a significant factor behind the economic growth of Pakistan.

The housing stock is growing at an average rate of 10% per year, and this trend will continue for the foreseeable future.

According to the World Bank, about 3 million housing units in Pakistan require building annually to meet demand.

This figure represents only a fraction of the total.

The property market offers job creation opportunities and investment opportunities.

The country’s real estate sector is witnessing a boom with an increase in demand for residential properties.

The number of new housing units has increased by 50% annually over the last five years.

This indicates that there is no shortage of investment opportunities in this segment.

According to the figures released by the Federal Bureau of Statistics (FBS), the total value of property sales in 2017 was $1.5 billion.

The volume of transactions stood at $7.2 billion.

The figures indicate the fastest rise in the real estate sector in the economy.

In addition, the construction sector is also experiencing rapid growth with the construction of more than 1,000 projects under different phases of development.

Real estate investors make hefty profits.

The country’s real estate market is booming, and many are profiting from it. A report shows property prices have increased by over 50 percent since 2014.

The real estate sector generated around $3.8 billion in gross domestic product (GDP) in 2016.

In addition, the real estate market is likely to grow further with population growth, leading to an increase in housing demand.

Does the economy of Pakistan benefit from real estate growth?

The economy of Pakistan is heavily dependent on the real estate sector. The real estate industry contributes to about 7% of the GDP and employs around 10 million people in the country.

It also provides a significant portion of foreign exchange earnings. However, it has faced several problems, such as lack of transparency, corruption, poor infrastructure, etc.

List of significant cities

There are three major cities—Karachi, Lahore, and Islamabad—regarding development in the real estate sector. These cities are hubs for real estate tycoons like Malik Riaz, who have made investments and completed commercial and mainly residential projects.

List of banks

Here is a list of banks in Pakistan that provide home financing.

HBL
MCB
Alflah Bank
JS Bank
Allied Bank
UBL

Are real estate consultants available in the real estate sector in Pakistan?

There are many real estate consultants available in the real estate market. But you should have some real estate knowledge that can help you find a good consultant. Then, you can find some of the top real estate consultants in Pakistan here.

Who is the key real estate market holder in Pakistan?

Few keep hold of the real estate market in Pakistan. They are AKD, Malik Riaz, Arif Habib and DHA.

However, several others are silent market holders in the real estate sector in Pakistan.

Property Prices

The real estate industry is a significant contributor to the economy of Pakistan. The sector has been growing at an average rate of 15% per year over the last decade.

The real estate sector has witnessed a sharp in property prices during the last few years.

Around 20 percent of the money from Roshan Digital Pakistan went into the real estate sector.

Overseas, Pakistan has made significant investments in the real estate sector in Pakistan.

PTI government had also offered an amnesty scheme that led to a sharp rise in investment in the real estate sector.

Real Estate Sector in Pakistan

Pakistan has vast land resources to use for building houses. The government should take advantage of this opportunity and ensure that all people can access affordable homes. If the government takes care of the people, the country can achieve great heights.

To develop the real estate sector in Pakistan, the government must take the following steps:

Provide basic amenities such as electricity, clean water, roads, etc.

Ensure security for investors and buyers.

Make sure that the laws are updated so that the real estate sector develops appropriately.

Encourage foreign investments in the real estate sector through tax incentives.

Establish a regulatory authority

Quick money

The real estate sector is a very lucrative business. However, there are risks as well due to volatility in prices following the domination of real estate actors.

The real estate sector can provide you with a steady source of income. You need to invest your time and effort into it. Investing in the right property will help you earn more.

One can make money from the real estate sector in many ways. Some people use their funds while others borrow money from banks or financial institutions.

Some of the methods include:

Buying properties and selling them after making improvements.

Renting out properties.

Selling properties at higher rates than what they bought them for.

Making deals with developers and builders.

Using the services of agents.

Buying properties using loans.

Borrowing money from banks