Aurangzeb Nadeem

Proposal for Zameen.com

The evolution of Pakistan's real estate sector since the turn of the century

Pakistan is a country of growing population which relatively grows the need of people for
all the basic requirements to lead a prosperous life. As food, water, air, security and shelter are
the five basic needs for the humans to survive. Shelter is the one thing that can incorporate all of
these requirements under one single roof, providing all that is needed by people to be happy and
always be free from ailments and diseases. Pakistan is blessed with vast lands and there is always
a prospect for growth. The estate business has been very prosperous and now it is considered to
be very turbulent. The investors have halted most of their endeavors in the field for an indefinite
period of time. Mainly because there is no solid return for the investment currently, also there is
a lack of buyers that would spend hefty amounts keeping in view the current scenario of the
country as of 2019.
To understand the full extent of the current scenario of Pakistan’s real estate business the
era before the turn of century shall be kept in view. The different stages of changes that have
made an impact through the years accumulate to present the current situation of this industry.
The post partition distribution and division of land was not the most effective plan to give people
their due share. Then came Bhutto’s nationalization of 1972, it saw the unfair and unjust
possession of private properties. This ultra-nationalist ideology ripped apart the people’s basic
right of owning their private land. But instead this scheme showed that the government has the
superior authority over all the properties, may it be a factory, an office or a house. This policy
had the main goal to neutralize the industries that became greedy to earn profit without
increasing the minimum wage of their employees. But the most alarming thing happened with
the advent of time when private properties were open for possession by unknown people. This
idea required no down payment before being able to possess a certain piece of land, it was a
hostile act of gaining ownership to a land. Many cases have been noticed around this period of
time where my own apprentices have lost their land.
There is this idea of age distribution demographic when it comes to the ownership of
land. This concept has been discussed in detail in Rizwan Ahmad and Pervez Azim’s paper
Changing Demographic Trends and Housing Market in Pakistan (2010). It shows that people of
different ages require the need of owning their own piece of land for the prosperity of themselves
and their families. It shows that the need for a proper housing plan arises after the age of 20 or
25. People that fall in the age quota prefer to have their own quarters, this implicates the need of
owning a land has arisen in the recent years, as the generation of high fertility has come of age,
they make their own demands. 1990s saw the boom of growth in the field of real estate, with the
prices taking a hike every changing day and the demands of people also rising with every
changing day. The properties bought in that period have seen a boost in their value in a short
period of time. This era saw a lot of activity in the market of property, people invested their
money to buy places at a cheap price, the place that are now worth millions after the regular
development that the country has undergone over the past years. The paper shows that the house
buying segment of the population that ranges from the age of 20 and above has increased from
47 percent to 50 percent since 1981. The future expectations are that it will continue on
increasing and by the year 2050 it will see a 72 percent increase in the purchasing of Real Estate.
Aurangzeb Nadeem
Proposal for Zameen.com
Although these numbers have been carefully incorporated with the studies conducted by
chieftain researchers after scrutinizing the trends in the marketplace; but according to the current
scenario of the country that growth in this market seems highly unlikely.
At the dawn of 21st century the realtors have been able to earn a lot of profits in this field
as the population explosion had to be managed. As of the census of 1998 there were around 19.3
million housing units with an average household capacity of 6.6 to 3.3 percent of persons per
room. As we have witnessed the dense rise of population, it is quite evident that these numbers
have sky rocketed in the recent years. The need to own private land has increased at every level,
but the inflation rates make it a difficult trade. The estate business has seen a lot of good times
but in the recent years it has been slow, with the new government of Tehreek-e-Insaf people had
high hopes of the marketplace being renewed into a fair ground after the party leader had
pledged to eviscerate corruption from all departments, but still the change is yet to be seen. Just
to give a better idea of the current situation of the market it can be observed the per square feet
rate of property in metropolitan cities of Pakistan. As of the first quarter of 2019, the average
house price of a square foot are PKR 10,402, PKR 13,158 and PKR 9,985 respectively for
Lahore, Karachi and Islamabad. Although people are investing in the field but with minimum
risks involved because the current economic status does not support a reasonable turnout after
investing a huge amount in the business. People at this time prefer holding onto their cash in
order to survive the worst economic crisis Pakistan has seen in years. With the hike in the value
of dollar against the rupee, that is the smart move. Because as introduced in the start, survival is
the utmost priority, while people have shelter, they do not prefer the luxuries at this state of time.