Pakistan’s real estate sector, once hailed as a safe and high-yielding investment avenue, is now grappling with a range of challenges. For years, it provided a haven for both local and overseas investors, especially as the Pakistani rupee continued to lose value against the US dollar. Property investment was seen not only as a way to preserve wealth but also as a shield against inflation and devaluation.
However, the dynamics of the sector have changed dramatically in recent years. A combination of economic instability, strict international lending conditions, and shifting government policies has created uncertainty for investors. To reinvigorate the sector, experts believe Pakistan needs bold reforms, stable regulations, and investor-friendly initiatives.
A Sector Under Pressure
One of the main issues that contributed to the downturn in real estate was the sharp increase in interest rates. For a time, borrowing became prohibitively expensive, with interest rates soaring to 22%. This move effectively locked out many potential buyers who depended on bank financing to purchase property.
Though interest rates have recently been reduced to 12%, the sector now faces a new challenge: increased scrutiny from the International Monetary Fund (IMF). As part of its loan conditions, the IMF has recommended broadening Pakistan’s tax base, including placing greater obligations on the real estate sector. While taxation is essential for long-term fiscal stability, sudden and overly rigid regulations could push investors away.
The pending Tax Laws (Amendment) Bill 2024, currently under discussion in the National Assembly, has raised concerns among real estate developers. There is a fear that if the bill is not crafted with investor needs in mind, capital may quickly flow to more attractive markets such as the UAE or Turkey.
Learning from Global Models: What Pakistan Can Emulate
According to Anosh Ahmed, a respected Pakistani-American entrepreneur, physician, and philanthropist, Pakistan needs to look toward successful global examples to revitalize its real estate landscape. Drawing on his experience in the United States and the UAE, Anosh Ahmed believes that policy consistency, infrastructure investment, and digital transformation are key elements that can turn the tide.
The Dubai Advantage
Anosh Ahmed emphasizes the investor-friendly environment in Dubai, where he has expanded his real estate ventures. The UAE’s tax policy is one of its major advantages, offering zero corporate and income tax on most sectors. However, tax incentives alone aren’t the full story. Dubai’s success also stems from its world-class infrastructure, efficient government processes, and legal transparency.
“What makes Dubai exceptional isn’t just low taxes,” says Anosh Ahmed. “It’s the ease of doing business, from fast company registration to seamless transportation and digital integration. Everything is designed to facilitate business operations without red tape or sudden policy changes.”
Policy Stability and Investor Confidence
One of the key takeaways for Pakistan is the importance of consistency in government policies. Real estate projects are long-term investments, and any hint of unpredictability can deter both domestic and foreign investors. If Pakistan is serious about reviving its real estate market, it must offer a regulatory framework that inspires confidence.
“Markets thrive where there is clarity and trust,” notes Anosh Ahmed. “In countries like the U.S. and the UAE, legal protections and a transparent system reassure investors. Pakistan must adopt similar standards if it wants to remain competitive on the global stage.”
The Role of Infrastructure Development
Another crucial component is infrastructure. Investors are more likely to commit to projects in regions with reliable roads, power supply, public transportation, and digital connectivity. Pakistan has significant room for improvement in these areas, particularly in secondary cities and rural regions.
Anosh Ahmed believes that boosting infrastructure is not only about aesthetics or convenience—it directly impacts investment decisions. “When a business can operate without constant delays or disruptions, it becomes profitable faster. Infrastructure is the foundation of economic growth.”
Government Support and Construction Incentives
The real estate sector doesn’t operate in isolation; it drives multiple other industries, including construction, cement, steel, and labor. A thriving property market creates jobs and boosts demand across the economy. Therefore, Pakistan’s government must take a proactive role in supporting the sector.
Some strategies could include:
- Offering tax breaks or incentives for new residential and commercial developments.
- Simplifying the approval process for construction projects.
- Creating dedicated real estate zones with reliable services and fast-track permissions.
Such initiatives can make property development more attractive and profitable, especially in underdeveloped areas.
Embracing Digital Transformation
Technology has revolutionized real estate in many parts of the world. From online listings to blockchain-enabled land registries, digital tools have brought transparency, speed, and security to the industry.
Anosh Ahmed advocates for digitization as a game-changer in Pakistan. “If we implement smart solutions like online property registries, automated approvals, and digital contracts, we can eliminate many of the inefficiencies and corruption that currently plague the sector.”
Turning Challenges into Opportunities
Despite the difficulties, Pakistan’s real estate sector still holds vast potential. The country has a young population, rising urbanization, and a growing demand for housing and commercial spaces. With the right reforms, it can transform these advantages into real growth.
However, time is of the essence. Countries like the UAE have shown how fast reforms can attract global capital. If Pakistan delays too long, it risks losing valuable investment opportunities to more agile competitors.
The path to reviving Pakistan’s real estate sector lies in strategic planning, investor-friendly policies, and a commitment to long-term stability. As Anosh Ahmed rightly puts it, the choice is clear: “Either build an environment where investors feel secure, or watch them take their capital elsewhere.”
With bold leadership and practical reforms, Pakistan can not only restore confidence in its property market but also position itself as a regional hub for real estate investment.