Pakistan’s Real Estate Updates to catch up on in 2021

Staying on top of real estate market trends does not only allow you to keep updated in regards to the real estate market but also increases your chances of making successful real estate decisions and real estate investments. Understanding local trends can be crucial to the purchase or sale of a property — no one, for instance, wants to invest in a property, only for its value to drop tremendously a month or two later. However, knowing what to look for — and why — can be challenging. Here is a list of 5 important updates that we don’t want you to miss! 

We are covering everything from how the pandemic has impacted markets globally to the laws being enforced by the current government. You don’t have to be an industry professional in order to make better informed decisions! 

  1. Amnesty

A lacklustre economic performance and Covid-19 were compelling factors to announce a special incentive package for the construction sector by the prime minister on April 3, 2020. The PM had now announced that the date has been extended till Dec 31, 2021. The date for disclosures of the source of income by the investors has also been extended till June 30, 2021 and the one for buyers till March 31, 2023.

The scheme provides immunity from the provisions of section 111 of the Ordinance , and no questions will be asked regarding source of funds from investors making capital investment in new construction projects in the form of money or land, either as an individual, as an association of persons or a company. This will act as a catalyst to increase economic activity in the country thereby improving employment opportunities as a number of sub-sectors and small and medium size industries are associated with the construction industry.

Moreover, the deadline for investors to complete their projects registered with the FBR under the package has been stretched to September 2023. Likewise, buyers of housing units and plots will enjoy tax immunity on their investment until March 2023. The banks will continue to disburse cheaper, subsidised mortgage finance to consumers till December.

  1. By-Laws of Real Estate in Islamabad

Capital Development Authority’s (CDA) new construction bylaws for high-rise buildings in Islamabad have been approved by the commission set to review the city’s master plan. The move is expected to attract more investors to the city and allow more space for green areas.

For instance, plots of 1,000 sq yds or above can have the floor to area ratio of 1:6, which was previously 1:5. This means, as a plot owner in Islamabad, you can construct tall structures up to 18 storeys. Plots even bigger than 5000 sq yd can have a floor-area ratio of 1:10, with no restrictions on the number of storeys. These buildings can be constructed along roads which have a right-of-way (ROW) of 300 sq yd in Blue Area, Sectors G-8 to G-11 and also on the Kashmir Highway.

The new measures are also expected to bring in more investment as there would no longer be tight restrictions to build high-rises. Investors aiming to construct skyscrapers in Islamabad wouldn’t have to wait around to apply for any NOCs. These structures also help save energy costs as well as construction costs.

  1. Naya Pakistan Loan 

This March, Prime Minister Imran Khan has instructed the State Bank and the National Bank of Pakistan to facilitate those applying for a low-cost loan under the Naya Pakistan Housing Scheme. The loan programme has been designed in such a way that the beneficiaries, currently giving their house rent, would use the same money to pay the instalments.

With this loan disabled persons, widows and other weaker segments of society would be given preference in the subsidised housing loan scheme. This means that the salaried class and people without hefty savings now have the opportunity to own a house. 

  1. Covid 19 – How the Market has been Impacted by the Global Pandemic 

The effects of COVID-19 pandemic have hit the world with a dramatic force, the real estate industry, which was booming for several years, has now hit rock bottom. Lockdown in every city has taken a chance from people to reconsider any business plans and implement them. 

Diverse real estate companies have been affected by the infection to differing degrees. The hardest hits in terms of real estate can be seen in the retail and hospitality areas, while office properties have likewise been negatively influenced as the corporate extension and migration plans are delayed. Keeping the 2008 recession as a baseline, land prices are expected to fall. Some landowners are now beginning the process of thinking ahead to when the crisis is over. Strategic review processes aim to know how real estate usage might change going forward.

Realtors firms’ abilities to weather the storm will ultimately depend on how they respond to challenges to the industry—especially the current declines in short-term cash flow and demand for space, as well as the uncertainty surrounding commercial residents/tenants’ ability to pay their bills. In the long term, the different behaviors forced upon the industry will have likely altered the way businesses and consumers use and interact with real estate.

  1. Crackdown on Illegal Societies and Encroachment 

In a bid to curb the mushrooming growth of illegal housing societies in Islamabad, the Capital Development (CDA) is planning to take action against owners of such societies. Apart from the societies, it is mulling action against companies who market such residential and commercial schemes within the limits of Islamabad Capital Territory (ICT).

Moreover, the CDA had also urged the public not to invest in any project in Islamabad without verifying its approval from the CDA. CDA had also directed all housing societies owners, management and individual developers who were building private housing societies schemes in Islamabad to stop construction work and get their building plans approved from the CDA.

This is great news for investors as this mechanism will ensure that better investment opportunities are provided through proper real estate channels. While affordable and conflict-free housing schemes are a priority for the government

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