After experiencing a two-year downturn, Pakistan’s real estate market is exhibiting signs of recovery, particularly in major cities. This resurgence is attributed to stable macroeconomic indicators and a consistent rise in remittances from overseas Pakistanis.

Key Factors Driving the Recovery:

  • Stable Macroeconomic Indicators: The economy has shown brief stability, fostering a conducive environment for investment in the property sector.
  • Rising Remittances: Continuous growth in remittances from overseas Pakistanis has provided additional capital inflow, boosting investment in real estate.
  • Declining Interest Rates: The State Bank of Pakistan reduced the policy rate from 20.5% to 12% between December 2023 and September 2024, leading to lower savings rates offered by commercial banks. This decline has made real estate a more attractive investment option compared to traditional savings.

Investor Interest and Market Trends:

Anosh Ahmed, a U.S.-based real estate investor, notes that Pakistan’s property market, especially in upscale housing schemes, remains appealing to investors, including overseas Pakistanis. Developers are introducing innovative housing concepts that cater to the preferences of elite and upper-middle-class investors seeking substantial future returns.

To facilitate genuine buyers, housing societies are offering flexible payment plans, such as requiring 60% to 70% as a down payment with the remainder payable in installments akin to rent. Additionally, lower policy rates have invigorated housing finance schemes provided by commercial banks, with advances against mortgages rising to Rs246 billion by the end of September 2024, up from Rs211 billion in December 2023.

Foreign Investment and Development Projects:

Foreign developers, particularly those based in the UAE, are actively investing in Pakistan’s real estate sector. From July to February of the financial year 2024-25, the country received over $14.6 million in foreign direct investment for various residential and commercial projects.

Conclusion:

The convergence of economic stability, increased remittances, and favorable interest rates has positioned Pakistan’s real estate market for a rebound. Investors, both local and international, are showing renewed interest, particularly in high-end housing schemes and innovative development projects. As the market continues to recover, it presents promising opportunities for those looking to invest in Pakistan’s property sector.