ISLAMABAD: Pakistan’s commercial real estate market is facing formidable obstacles due to low investor confidence and stagnating prices. Analysts caution that the industry is preparing for a protracted decline, which would have an impact on investors and the whole economy.
Hassam Ali, a real estate policy expert at the All Pakistan Real Estate Association, stated that there are no immediate signs of recovery in the commercial real estate sector, which was once a flourishing hub of activity. Instead, the sector is currently stagnant.
In an interview with WealthPK, he contended that the industry’s downfall was caused by a number of variables, such as onerous rules, a dearth of government backing, and shifting market dynamics. “We cannot expect any significant revival until the government adopts progressive policies and modernizes its approach to the sector.” Because there are little incentives for development and the high expenses of complying with regulations, investors are hesitant to enter the industry. As a result, there are far fewer new projects already underway and an abundance of unsold commercial real estate.
He went on to say that in order to revitalize the industry, substantial reforms are required. These include enhancing political stability, putting in place more efficient and clear rules, and offering financial incentives to draw in capital. “Pakistan’s commercial real estate market is unlikely to see a recovery before 2030 without these changes,” he stated. Speaking with WealthPK,
Khawaja Umair, the marketing head of Rawaha Real Estate and Builders, stated that the commercial real estate market is now susceptible to outside shocks due to a lack of proactive planning and supportive policies. The nation’s economic woes, such as depreciating currency and inflation, have made the commercial real estate market more problematic.
“A vicious cycle of underinvestment and declining property values has resulted from rising interest rates and unstable asset values making it difficult for investors to secure financing for new projects,” he continued. He concurred that in order to revitalize the commercial real estate industry, considerable adjustments are required. In order to encourage commercial growth, the government needs to take a more proactive stance, which includes lowering regulatory burdens, providing tax incentives for new ventures, and making infrastructure investments.
Umair emphasized the potential for direct investments of billions of dollars in the real estate industry. He claims that the commercial real estate market in Pakistan is in terrible shape and is not likely to improve until 2030.In order to revolutionize this business, he promoted a collaboration between the public and private sectors. Investors and companies face an uncertain future in the absence of these measures, since the chances for resurgence remain poor.
