Real Estate Challenges and Opportunities
Real estate is an emerging sector of Pakistan. People spend around $5.2 billion on construction yearly. As per the World Bank estimation, the ratio of a country’s real estate assets varies from 60 to 70% of the nation’s entire wealth. This sector has a lot of potential for growth and progress. Real estate investment is one of the most reliable methods that offer high ROI. It is the best investment in Pakistan because it is a tangible asset.
Despite its importance, the real estate industry both the commercial and residential real estate market faces challenges. Moreover, there are many factors that are impacting the real estate sector of Pakistan that affects its growth. Here are some challenges and opportunities that the real estate of Pakistan offers.
Challenges that real estate represents
Rising rates and COVID
Increasing rates have increased the affordability crisis. The current economic state will cause Pakistan’s economy to decline by 1.5 percent in 2020-21. COVID has a negative influence on real estate.
Keeping the past situations in mind realtors are prepared for ups and downs in the market. Rather than opting for an old and traditional approach, real estate owners are looking for futurists, psychologists, technologists, and sociologists for the solutions
The real estate industry has been challenge by many financial, economic, and political issues but there will be high growth in the real estate sector.
It is probably the number one issue facing the real estate industry in 2021. However, People are increasingly finding it difficult to find affordable housing near their places of employment. Increased demand for houses has made it really hard to get “reasonably” priced housing in the desired location.
Recently various new projects are launched by different realtors to overcome the need for houses.
Latest Technology trends
Technology has made its way in the real estate industry. Now buyers demand smart homes fully equipped with the latest sensors and furniture. Video marketing and virtual tours have been around for quite some time but will almost certainly continue to evolve and require realtors to keep up with this technology.
Different real estate companies provide a full visual tour of the home before buying to potential buyers. This has potentially increased a significant number of sales.
Natural disasters and incredible climate changes play havoc on homeowners and developers. It can affect the construction pace of new projects and increase the risk of both commercial and residential properties.
New residential housing developments require new infrastructures, such as water, power, and sewer services. The group also stressed that an absence of developed public transit hampers development creates congestion and ultimately increases costs.
Opportunites real estate represents
Despite these potential challenges facing real estate in the coming years, this asset class also provides some potential advantages for investors. Here is just a partial list of the factors pointing to the possible opportunities for individuals investing in real estate:
High Economic Growth
Real estate is increasing rapidly, thus a bounteous impact on the economy means more productivity and a greater number of vacancies. To accommodate foreigners and locals, relocating for jobs, more residential real estate is needed. In turn, yielding more beneficial opportunities for investors.
There are various taxes and other elements associated with them. However, as far as commercial properties are concerned, these taxes can be used for one’s benefit.
Transparent and Secure
Transparency and security are two vital components of real estate transactions. Moreover, the idea of transparency includes a vast range of areas, from fair practices, legitimate documents, and no hidden costs.
But, its physical worth will drop, usually in 27.6 years. Also, other aspects might fall over ten years. All these losses can be balance out through a small proportion of market value profits.
Easy Installment Plan
Commercial projects in Pakistan offer best-suited 3 to 5 year plans to buy real estate in installments. It comprises a 20% to 30% initial down payment with a sum of money to be paid on a monthly or quarterly basis. The most captivating benefit of installments is that it remains the same, despite a hit in property costs.
If you’re an investor, you aim to search for real estate that will give you huge, rewarding returns. What’s enticing about this project is that it provides immediate monthly income.
Real Estate Challenges and Opportunities