A REAL ESTATE OVERVIEW OF THE YEAR 2021
“For the past two decades, real estate in Pakistan has been the sector that has delivered the highest return on investment.”
Real Estate Pakistan is the biggest expanding business. It has emerged as a national asset for the citizens to take benefit from for over two decades. According to a research released this year, the real estate business ranks second in terms of delivering the highest return on investment.
Redbox holds real estate information and happenings with a deep interest in this article, we will be illustrating how the real estate market has been like in the year 2021: the profit, loss, instability, and stability the real estate sector has witnessed.
The Start - Jan-April:
The start of the year 2021 due to covid was not as flourishing as it used to be before. To stable the situation numerous efforts were made by the Government of Pakistan and realtors to savior it by providing numerous opportunities. In which the main plan was placed in the market by the government as an amnesty program and which was actually a relief fund, which originally worked for a while but did not work for a longer time as it was shut down after a few months. The amnesty program did work for construction and development to begin the working cycle, and numerous real estate events and working were visible during this period.
The strategy of the Government of Pakistan of introducing amnesties packages related to real relief did come as a savior. Because of the amnesties, investors who had previously avoided investing for fear of being caught by the FBR (Federal Bureau of Revenues) were able to participate in the work. The amount of advantage provided was excessive, yet it was only for a limited period of time, which resulted in rapid development but was cut short far too soon.
The Middle: May- June:
The two major happening of the mid-year were the anti-encroachment drive and the Naya Pakistan Housing Scheme.
Naya Pakistan Housing Scheme:
The PTI Government in which a loan of over Rs46b was approved introduced Naya Pakistan Housing Scheme and Loan. The initiative started in the Jan of 2021 but it was seen to gain momentum during this time when PM inaugurated NPHS in multiple cities including Islamabad, Nowshera and Faisalabad.
Anti- Encroachment Drive:
The Supreme Court of Pakistan was seen in action when a number of big decision related to encroached areas was made. The supreme court of Pakistan published a judgment in the middle of the year. The outcome of a number of the lawsuits was made public, including the well-known Aladdin Shopping Mall, Tejoori Heights, and the tragic NASLA tower.
Around July, investors were taken off guard when they discovered how the situation had changed and how vital NOCs may play in the real estate business.
In June, budget was released in which the real estate industry was visibly seen to be considered a priority. The budget's goal was to lower taxes and devote funds to jump-starting the development and building sectors in order to spur economic growth and job creation. It is not true that the government made no efforts; in fact, the efforts were rather evident; nevertheless, the efforts were only visible for a short time and were cut short much too quickly.
Find more about this in the following video:
The Yet Another Start:
Another significant event that occurred during this period was the FBR's announcement of higher taxes in over 40 localities. From October onwards, a number of events have occurred as a result of the FBR treating the limitation seriously, and investment declined. However, demand exists, and it is a commonly known reality that if demand exists, the product and the associated sector are likely to witness growth.
The FBR deadline for non-registered files and taxpayers expires on December 31, 2021, and it has been determined that non-registered files and persons who are not taxpayers will no longer be permitted to trade in property.
All of these events and FBR restrictions on real estate are being stated to be correct in one manner since real estate is never recognized as a suitable tax producing business, but statistics show that it contributes the most to the country's Gross Domestic Product (GDP) and is also a tax haven for the government. Besides, the government's clear efforts are excellent for the economy as well as helping real estate agents. This industry might lead to more efficiency in terms of revenue generation. Additionally, at this time around November, the property taxes were revised too. Moreover, the prices of construction substances increased up to 15% which is more than what it was in 2020 and before.
Another main role in the industry was played by the inflation rates which increased the prices and thus many delayed their decision of investment as a result
The crux of the affair:
Overall, the real estate market performed well this year, although it is still not at a high point on the curve. However, because demand is imminent, real estate sector anticipate a brighter future. Furthermore, the changes implemented this year have taken their time to adjust to the circumstances and are expected to show results in a month or two. According to experts, the New Year will undoubtedly be an amazing year for the industry, as the changes that have been implemented in the form of revisions will result in a positive and stable environment.