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An overview of GCC and Pakistan Real Estate

Currently Pakistan’s real estate serves as a big pillar in Pakistan economy. According to the World Bank estimate, real estate contributes 60 to 70% of the country’s total wealth and total amount $300 to $400 billion. Unfortunately, since 2017 Pakistan economy is crippling facing politically instability but economic growth of Pakistan remained 5.8 the highest in the history of nine years. Currently the growth rate is 5.5 that effecting economy and real estate business as well. Profit in real estate investment is seemed a huge achievement in international arena. It will boosts human lives, removes poverty, provides employment for many illiterate individual by construction, enhances luxuries life and also promotes tourism.

A bird’s view eye on Gulf Cooperation Council (GCC) countries started 30 mega projects in the early 2020 by representing US$ 1 trillion. These projects will helpful for GCC economy in the future. It will improve tourism entertainment of venues, financial health care, and residential area.

The project based on innovative techniques showed culture, heritage and history that sustainable for the environment. Examples include Al Harir City in Kuwait, Lusail City in Qatar, the Red Sea project and NEOM in Saudi Arabia, and the Riyadh City project in Abu Dhabi in the United Arab Emirates (UAE). Others are regeneration projects such as Muharraq in Bahrain, and in Saudi Arabia the downtowns of Jeddah and the capital, Riyadh.

Similarly, countries planned to transform economically and socially, but in Pakistan our minister and politician keep confused the nation in the pond of boarder issue or corruption.

Many reasons is connected why real estate is not showing potential as it should be, such as absence of incentives for the invertors, ineffective law that restrict the investors, banks transduction policy, ban on non-filers to buy property worth more than 5 million, registration of investors in Federal Board of Revenue (FBR) if they have buy more than 5 million of property, high taxes etc. Commonly investors want to maximum benefit as much as possible. Real estate business has a large platform of investors and supporter. It includes real estate agent, property manager, property inspector, credit counselors, real estate investor, remodeling contractor real estate investor etc. For investor it is difficult to pay taxes and avoids owning tax policy, which is enforced by the government.

Moreover, real estate business on trust most of the time people complain against fraud and illegal sealing. The other major gap is seen in proper utilization of development budget that slow down the real estate industry and destroyed the infrastructure. All these causes affect the business environment therefore, according to World Bank report 2020 Pakistan stands 108th ranked on doing business.

Pakistan investor and dealer need to learn some strategic tool about real estate business. According to Book “Real estate 101, BUILDIND WEALTH WITH REAL ESTATE INVESTMENT” forwarded by “Donald Trump” by Trumph University suggested all real estate domain, how to become a real estate entrepreneur, how to value property, profit with and within the rules, create market segments, pay less than the property is worth, offer your customer what they want, market your property for top dollar, make great decision, and at last step of successful management honor your appointment promises and agreements, program your positive self-talk. These strategies should be followed by Pakistani dealer and investors mostly are uneducated or unaware about it.

Government should be limited taxes, allocated maximum budget for housing and town development, focused on, value of property possibility, cost approach, comparative sale approach, income approach, estimate cash flow market value, premium value, price trend, price to earnings, and the most important digitalized tax, banking and governance system which will reduce corruption charges. It wills also facilitates oversees Pakistani, that mostly like to invest in real estate sector. For effective economic growth Pakistan should promotes real estate and infrastructure.

The author Faiza Saleem is a M.Phil, research student at University of Karachi

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