Islamabad — Pakistan’s real estate sector is poised for a strong comeback after experiencing a two-year slowdown. Industry experts attribute this positive shift to improved macroeconomic indicators, a consistent rise in remittances from overseas Pakistanis, and attractive returns compared to traditional investment avenues.
As commercial banks reduce their savings rates following policy rate cuts, investors are seeking alternative, safer, and more profitable options. With the stock market approaching its peak and carrying increased risks, many investors are now redirecting their capital into real estate — traditionally seen as a secure and long-term investment.
Anosh Ahmed, a real estate investor based in the United States, highlighted that high-end residential societies and luxury housing schemes remain highly attractive, especially for overseas Pakistanis. These projects offer stability, capital security, and substantial future returns.
In response to increasing demand, developers—both local and international—are introducing new and innovative housing concepts designed to improve lifestyle standards and meet the preferences of upper-middle-class and high-net-worth individuals. Many of these projects feature flexible payment plans, making real estate more accessible to a wider audience.
According to Ahmed, numerous housing schemes now allow buyers to pay 60% to 70% upfront, with the remaining amount divided into manageable monthly payments, resembling regular rental expenses. This has made property ownership feasible for many potential buyers, especially expatriates.
The recent cut in the policy rate by the State Bank of Pakistan (SBP)—from 20.5% to 12%—has lowered borrowing costs, triggering a notable increase in housing loans. Mortgage lending surged to Rs246 billion by September 2024, compared to Rs211 billion in December 2023.
This environment has encouraged banks to introduce more housing finance schemes. Experts believe that if the government and financial institutions introduce specialized low-interest home financing programs, it could further stimulate domestic and overseas investment in the property sector, while also boosting construction and allied industries.
Maaz Liaquat, a real estate consultant and former official of the Defence and Clifton Association of Real Estate, observed a noticeable rise in property transactions in prime areas of major cities over the past few months. New residential and commercial projects launched by both local and international developers, particularly in coastal and upscale urban areas, are capturing significant investor interest.
However, speculative trading in plots remains subdued due to heavy taxation, leading many investors to focus on generating income through rental yields and resale profits instead.
Foreign interest in Pakistan’s real estate market is also on the rise. UAE-based developers are actively working on large-scale residential and commercial projects. As per SBP data, the country attracted over $14.6 million in foreign direct investment (FDI) in the real estate sector between July and February of the 2024-25 fiscal year, reflecting growing confidence in Pakistan’s property market.
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