Mansoor Sadiq

Amid the current economic challenges, the real estate sector has also been hit by uncertainties, and people are generally reluctant to invest their savings in this sector. However, despite facing multiple odds and challenges, the real estate sector has been the key driver of economic activities in the country during the last two decades. It has contributed significantly to creating employment opportunities, attracting investment and ensuring economic recovery.

President of Islamabad Estate Agents Association (IEAA) Sardar Tahir Mehmood told WealthPK that the real estate is the most important sector of the economy providing more than 7% of total employment, and over 72 allied industries are connected with this very sector. Tahir pointed out that rising cost of construction material has discouraged investors, and also hindered development process on under-construction projects.

He said that due to rising construction costs, the developers and constructors are facing difficulties in completing their ongoing projects in time. This has dented the confidence of customers, and they are not feeling entirely conformable in investing in the real estate sector. The IEAA president said monopolies and cartelisation in the supply system of construction material are also discouraging competition in the field and customers had to pay whatever price suppliers set.

He urged relevant authorities to keep check on prices of construction material like other industries to break monopolies and cartelisation. Khizar Ayub, a member of the Executive Committee of Association of Builders and Developers (ABAD), urged the Competition Commission of Pakistan (CCP) to act against the monopolised tactics of the manufacturers of steel, glass, tiles and other material, who have raised construction cost manifold.

He pointed out that the rising prices of construction materials has multiplied the cost of construction projects. This downslide of the construction industry has caused massive loss of jobs and slowdown of economic activities. Industry experts agree that manufacturers of construction materials are also facing difficulties due to restrictions imposed by the government on import of raw materials. The estimated value of Pakistan’s real estate sector is around $2.3 trillion, and through proper regulation and documentation, this sector has enormous potential to boost the annual GDP (gross domestic product) growth significantly.

The real-estate sector is not simply limited to the sale and purchase of land. It consists of construction of housing projects, tailing, hoteling, and renting of spaces for official or trading purposes. In Pakistan, more than 200 industries depend on real estate such as cement, timber, building, sanitary fittings, glass manufacturing, steel, furniture, paint, plastics, electric fittings, cables, and electronics. The combined contribution of the construction and housing sectors to the country’s GDP has been consistently higher than 9%. With the rising population and the ever-increasing housing demand, Pakistan’s real estate sector has the potential of exponential growth.

Credit: INP-WealthPk