Real estate market of Pakistan has again come to the point as before 2014, meaning that it has again picked momentum of rising in prices. 2014 year proved to be the very bad year concerning the property market because of the political and security issues and along with this, other inherent factors which has hampered the growth of this sector, said by the Akbar Sheikh, who is a property developer from the Lahore.

There were certain points in the year like before and after of Ramzan, the property came to a standstill level, despite of the problems, the year saw the excellent growth in some areas of property and thus it was thought to be stable.

The reason, why the property is still having a growth problem is the highe r interest rate, which is hampering the growth of the property development. And due to this, finance to GDP ratio is below 1pc. The lower rate on investment in the property means that, people are motivated to invest in the real estate of UAE, because the real estate in the Dubai are offering the higher rates return on the investment and in this way, people are preferring to invest in the UAE.

Many investors and developers are considering poor security conditions and political uncertainty as a biggest factor behind last’s year’s slower growth in the market. Yet, investors say that these factors are temporary but there are certain regulatory factors, which are stopping the property market from reaching its potential.

Punjab region has seen the hampered growth due to very high interest rates, legal and regulatory hurdles are some of the main causes of stopped progress in the Land development sector.

In order to make this industry as a lucrative industry, we will have to create a more transparent market by means of digitization of the land records, establishing strong and functional regulatory departments, which could help the property to ensure the best parts of the services in the land sectors.

Mortgages rates are very high and these rates are near about 15 to 18pc, as compare to the rates of 2.5pc in Hong Kong, 2.7pc in Japan, 7-8pc in China, 8-12pc in India, are the smaller rates, which are offering the best rates of returns, and these rates are offered to be the best rates. The higher interest rates in Pakistan are the major cause, which are hampering the growth of the property industry.

This increasing rates are stopping discouraging the people to be a part of this investment and that is the reason, we will again say that HBFC needs to revise the interest rates and if we look the models of HBFC, then India has followed this plan, and this has become a greatly successful in India. Moreover, the developers should be facilitated by the government agencies to spur the growth in Industry. Many people agree on this fact that, real estate agencies in Pakistan are cheaper than the India and even cheaper from the Arab’s real estate prices. So, here, we can add that, prices are higher in Pakistan than India and Arab countries.

India has done a tremendous job in supplying the housing facilities by following a good mortgage policy, low interest rates, and supporting its private sector. In the previous five years, the property rentals have gone higher as compare to the real estate prices in the last one year. He said the average yield of rental is about 3 to 4 percent, and even highly rental yield areas include Johar Town Lahore, Clifton Karachi, Defense Lahore and Karachi, and the yield rate is 5 to 6%, and it shows that an investor will require to recover its investment in 20 years, and this is also the reason that rate of return in the property investment is 9 to 10 percent in Dubai, that’s the reason, people go in Dubai to invest in real estate business.

Pakistan receives a major chunk from the remittances in the last financial year, and Pakistan has received 16bn dollar in the last financial year, and out of this amount, near about 2-3bn dollars were invested in the real estate business. This is the reflection of the surety of the people about the safety of their investment as this market has never crashed as stock market.