About Real Estate Business
Property has been one of the most attractive businesses in Pakistan for the last ten years. This business reduces investment risk and offers a high-profit margin all together. Therefore the property business has attracted much investment in recent years. However, this business has significant implications for several socio-economic indicators. The property business requires a considerable amount of investments and earns a high-profit margin than the standard investment, therefore leading to enhanced income inequality. Real estate investment minimizes the velocity of money, pointing towards a lower level of production. The tendency of industrial investment reduces due to this business. Nonetheless, no scientific study on the outcomes of the property business exists in Pakistan.
The property business has some characteristics which other businesses do not have. These characteristics have significant implications for many indicators of economic and social welfare. For instance, the property business needs enormous investments, and the return on these investments is also higher than the ordinary investor. This means fast growth income for an individual leading to expanding income inequality and driving away from the Millennium Development Goals.
For Instance, Al Ghurair Giga Pakistan is famous for constructing exceptional and farsighted projects. They believe in creating and enhancing the places that people work, live, and play in by understanding the varying requirements of societies. Besides, they have built one of the most elegant projects, including Malls and Apartments in Islamabad: Giga Mall, D Mall, Lignum Tower, Defence Residency, Defence Tower, Defence Tower II, Defence Executive, El Cielo, El Cielo Prime and much more to come.
Some Salient Features of the Property Business
Capital Intensive Business
The property business is highly capital-intensive. It needs a lot of capital investment and a minimal amount of labor, particularly when it comes to the purchase and sale of land. The land investment, even in millions, does not create any permanent employment and gives unique possibilities except to the buyer, seller, and agent helping the deal. An amount of more than 10 million rupees, if invested in the agriculture sector, can employ more than hundreds of people in on-farm management and marketing. But the equal amount, if invested in the land purchase, will give permanent employment to nobody. For a country where the unemployment rate is very high and the percentage of the population entering the labor market in the coming few years is the highest in the world, this type of capital-intensive investment is very undesirable.
Risk-Free Business
The property business is risk-free in the sense that it does not have any worry of dacoit or theft. Properties mostly don’t have a chance of devaluation; there is no worry of loss due to the spoiling of the product. There is no cost to protecting the product too. The above-bounded amount of land ensures a steady rise in the prices of property. These properties make the real estate business sure to provide a positive rate of return. The high return lessens the capital flow toward industrial investments and agriculture, which can create many employment possibilities.
Attracts People Who do not Want to Work at Enterprise
For the people involved in business, the only condition is to purchase a piece of land and then wait till the prices go up. Minimum labor and entrepreneurial panic are the need for property business. Therefore this property business draws the attention of whoever wishes to invest their money in a profitable industry and they would not be required to supervise their property land personally. People living overseas are, therefore, particularly attracted to investing in real estate or properties. Consequently, a significant proportion of remittance goes into this business.
High-Profit Margin
The property business is probably the highest profit margin amongst the business, where investors do not want to act as an enterprise. Commercial plots purchased for two million can have a price of 20 million within a couple of years. The high and sure profit in the property business minimizes the attraction of other companies.
Advantages of Real Estate
Besides the undesirable consequences of the property business, there are numerous advantages as well. Mentioned below are a few benefits.
Access to Necessities of Life
The residential amenities created by property developers usually are well planned and always ensure that the necessary facilities of life are available. The housing schemes generally have hospitals, schools, security checks, transportation, and market facilities available. Furthermore, towns developed by property developers are not very congested. The unplanned traditional colonies and towns lack many of these facilities.
Flexible Payment Schedule
Several property developers offer their schemes in easy and simple installments. This is for the people who are incapable of paying the price of a property in cash at that very moment, can pay in installments, and gain access to the housing facility. This is a massive advantage for a relatively lower-income cohort of society.
Employment
The construction side property business creates job opportunities, not only in construction but also in many other related industries. Cement, steel, furniture, ceramics, communication, and many other industries get the advantage of the construction industry.
Conclusion
This blog has described in detail the desirable and undesirable outcomes of the property business. The property business minimizes the charm of agricultural and industrial investments, which can produce a lot of job opportunities and the output is positive. Similarly, this business increases income inequality and makes access to housing more difficult for the middle and lower-middle class. However, we do not consider these to be the ultimate words on this issue. We wish the startup of a healthy debate to end up with a suitable policy to harmonize the business with national needs.
On the other hand, Pakistan’s economy has many untapped resources. We can expect the property market to increase further. The government should pay close attention to the property industry and be as favorable as possible in terms of training and giving the right education to interested groups. Professional training is an essential factor for success in today’s highly competitive marketplace.