31/05/2022
Real Estate Business Feasibility " (2022) "
- Why real estate is overvalued.
- How we can gain return from it.
- Impact of DC rate & FBR rate on market rate.
An analysis of data from the ministry of planning, the State Bank of Pakistan (SBP), the Pakistan Stock Exchange (PSX), found that the total value of assets in Pakistan, excluding the value of the commercial real estate and private businesses, is abnormally overvalued. It is estimated that over $19 billion sailed into empty urban plots in 2021.
The contribution of the real estate sector to GDP has been more than 9pc per cent. According to the 11th five-year plan (2013-18), Pakistan’s housing shortage is assessed to be about nine million units. This implies that more than 33pc of 32m families in Pakistan do not have sufficient housing while the valuation of residential land is increasing abnormally.
This abnormal valuation is further classified by SBP by comparing DC (deputy commissioner) rate, Federal Board of Revenue (FBR) rate and market rate of one Kanal plot in Lahore, Islamabad and Faisalabad which estimated a difference with a gap of between "two to five times'
The year 2021 was truly an outlier. The total amount of money that flowed into empty urban plots of land was $19bn last year, which is higher than the previous four years combined. The numbers and estimates are proof that we have a lot of overvalued or unaccounted for capital invested in this sector. The value is not transferred to actual home-seekers.
Since 2018, the real estate market has survived on its knees mainly because it has confronted monetary, financial, political difficulties, various strategy issues and the absence of certainty. It scarcely figured out how to endure the previous downturn, fundamentally because of enormous investments by Pakistanis living abroad.
All these factors add up and the vacuum left by the real-estate sector explains the recent rise of property tech companies in Pakistan. They started with paid listings on sites such as Graana and Zameen, which only touched the top of the buyer decision journey funnel. The bottom of the funnel, where payments are controlled, is where the real money and data insights lie.
Zameen, the leading property portal based in Pakistan - offering the highest levels of service to property buyers sellers landlords tenants alike and to real estate agents in Karachi Lahore Islamabad and all over Pakistan. We are providing quality property - commercial plots, lands and markets - vil...