The year 2022 has been a mishmash for the real estate sector across Pakistan. Due to political mayhem and economic instability, the real estate sector has gone through a great deal. Particularly in the metropolitan cities of Pakistan such as Karachi, Islamabad, and Lahore. With the start of the year 2022, real estate consultants and investors are busy rediscovering. They’re revamping their marketing plans and strategies. So that they could protect more leads in the forthcoming year.
But before we get to the tips, let’s take a brief look at the evolution of real estate in Pakistan.
The Evolution of Pakistani Real Estate And Challenges To Succeed
Anyone surfing the web, turning on the TV, or driving by numerous billboards will have noticed many advertisements for real estate projects in Pakistan. The sale and development of the real estate sector dominate Pakistan’s marketing and advertising landscape. In particular, there is an exponential increase in the sale of units in under-construction real estate projects throughout Pakistan and the means of their sale. Nowadays, developers are selling lifestyles and dreams.
Elegance In Marketing
We are developing the most incredible projects with sprawling infrastructure and spotless designed properties. There is a new level of elegance in the marketing and scale of the property, which reflects demand as Pakistani house owner becomes more selective though there is still lots of room for improvement.
There is still a belief that investing in Pakistan is risky. Despite strong domestic demand, Pakistan currently is 120th out of 127 countries in the IPRI (International Property Rights Index). Although, In Jones Lang Lasalle’s Global Real Estate Transparency Index, Pakistan is at the Low Transparency tier and has an overall rank of 89 out of 100 countries.
Purpose of Rankings
What are the purposes of these rankings? First, the negative thought of Pakistan brought about as a result of the current geopolitical and security situation affecting Pakistan in many areas, with real estate being no exemption. But that does not entirely explain such a low rating, particularly as the security situation has enhanced immeasurably over the last few years, and it is obvious that other factors prevail. Unlike other regional markets, Pakistan is not a well-regulated market and does not offer enough legal protection for investors.
This is essential, especially for foreign investors (including overseas Pakistanis). Eventually, whether such customers invest or not would depend on whether their investment has protection. Relying entirely on patriotic fervor is not a winning strategy. The Pakistani markets will never become flawless if they continue to ignore introducing investor protection regulations. This is because every investor now expects legal protection for their interest. It’s just like in other markets like Malaysia, Dubai, and India.
In the last few years, a constant stream of regulations issued by the Government of Pakistan and local authorities such as the Lahore Development Authority (LDA) to protect investors and regulate the market. The LDA has circulated detailed rules regarding the approval of private housing societies. LDA is a municipal authority that requires planning and development rules. But it doesn’t act as a real estate regulator.
Also, the federal board of revenue (FBR) has published advice to investors on how to invest safely across the country. These initiatives are praiseworthy and notable improvements, but interventions of this nature, which are a direct result of previous fraud and scandals, are reactionary and do not go far enough. They will not address the abandonment or delays of projects and cannot entirely ensure to protect the investor’s stakes.
What we need
Instead of relying on well-intentioned, location-specific, non-binding advice and ad-hoc regulation, we need provincial and federal real estate regulators with wide-ranging powers to protect investors, streamline developers’ approval process, and minimize red tape. The Pakistani Government is moving in this direction by passing Section 456 of the Companies Act 2017, which covers opening escrow accounts and regulatory oversight through the Securities and Exchange Commission of Pakistan (SECP).
This is a promising start – but it is not a permanent solution. The solution rests in industry-led reform with a regulatory authority which includes real estate professionals and not, with all due respect, the SBP, SECP, and municipal authorities to act as real estate regulators.
We would suggest the following steps, as a minimum, in order of Preference and Practicality.
- Build an industry regulator (both on federal and provincial levels) with extensive powers to issue and implement rules, hear complaints, and, most importantly, regulate the overall market.
- All developers and projects need registration with the regulator for transparency and agreement.
- Deposit all investor funds into escrow accounts managed by approved financial institutions to be utilized entirely for project development.
- Streamline the approvals for developers to create a far better development and planning regime.
- New survey regulations provide certainty on purchasing, locating, and measuring the property.
- Regulate the real estate brokers to uplift the profession and prevent unfair and corrupt practices.
- The rules regarding land acquisition and ownership need to be systematic and strengthened by the real estate regulator.
These reforms need implementation in a lurch manner – starting with Islamabad and Gwadar real estate projects. This way, we can discuss what will work and is suitable for the Pakistani market before rolling out adequate regulations for the rest of the country.
Market Driver reforms
However, it is because of sensible market-driven reforms that other rising markets have been able to upgrade their industry, improving local and international demand. Nowhere is this more obvious than in Dubai, which has been converted into a globally recognized property hub. Our neighbor India, with a population of 1.3 billion, is an even more fitting example as it has a constitution and legal system very similar to ours. India passed the Real Estate Regulation and Development Act 2016, which includes identical provisions to what is given above, including establishing a State and a Central Government real estate regulator.
Level of Protection
The Pakistani investor earns the same protection as other investors in other markets. Developers must develop, sell, and market property based on their rules of law. Arbitrary and ad-hoc decisions do not blindside them by multiple, often competing, government entities. If we perform reforms of this nature, we will create a world-class regulatory regime to complement world-class real estate projects. In Pakistan, the real estate market is emerging, and to reach the next level, it is necessary to build the legal foundations essential to support the weight of future investment.
3 Tips to Make The Most of Real Estate Opportunities
Below are our tip to help you make the most of these opportunities.
1. Promote your business on Real Estate Portals
Gone are the days when investing in renting or purchasing an office in a commercial area for real estate consultancy was adequate to attract walk-in customers. Nowadays, it would help if you made your business appear on the leading online real estate portals of Pakistan so that you can get clients to know you and contact you in case of any real estate property-related queries. Do not wait any longer if you have not yet reached your business listed at the local real estate portals. This is the right place where the majority of the potential clients exist, not at the local commercial markets.
2. Grab business from the Social Media Sites
By increasing the social media presence of your business, you can get yourself known to millions of prospective customers. Social media platforms such as Twitter, Facebook, and LinkedIn top the audience lists. You must create an official Facebook page for your real estate firm and get as many likes from your aimed market as possible. You can also get the services of a social media specialist. Someone who can keep your page updated with the latest local real estate events. Plus, work on growing the likes of your page to expand your business circle. You can pay Facebook to advertise your business to prospective customers to enhance your social media marketing campaign.
3. Improve your Industry-Knowledge
Being a real estate professional, it is a prerequisite for you to have in-depth knowledge of the industry across the region you are dealing with. For example, if you deal in properties within Islamabad, you need complete insight into all the happenings in the real estate sector across the city. You need to be aware of the variable rates, upcoming developments, and residential/commercial projects across the city. It has become quite easy to stay in touch with the latest happenings and products in your industry through the internet. You must regularly and thoroughly study the property pages of all the local magazines and online portals and subscribe to all the social media pages relevant to the real estate industry.
The year 2022 will be a main year across the nation in terms of property investment. Several contemporary commercial and residential projects are coming this year including Goldcrest Views, Vacation Homes, Central Palace etc in DHA 2 Islamabad. If you are also one of the real estate specialists in Pakistan looking to get the maximum out of this profitable industry this year, we’re here to help. Following the tips mentioned above will surely help you achieve your business goals. Thank you for reading!