A country, much like a castle cannot stand proud atop pillars of sandy nothingness, as having a sturdy foundation is necessary for any form of progress. Naturally this is true for Pakistan as well, and it goes without saying that among all the pillars which form the foundation of this country, real estate may be the one that has undergone the most tests and trials of time. As can be seen through the real estate sector analysis in Pakistan.
The pillar of real estate has seen many weathers, there were many issues that came when supporting the foundation of our country’s economy. Real estate developments have slowed down since 2017 due to political turmoil and constant change in economic and financial policies. If we take a look at the developments of 2019, we see that the performance has been more dismal than the present. There were many financial, economic and political challenges that the countries faced even at that time, they slowed the progress of the real estate entirely.
The arrival of 2020, with the spreading global pandemic, made the road to success look even more difficult, but it ended up to be a good year for real estate after all. The government introduced a number of schemes that motivated the citizens towards investing in this sector. These new schemes and laws are what will be the cause of rapid progression in 2021.
But the real question that comes to mind is that where did the damage begin and what was done to make amendments? The real estate sector analysis will help us properly identify the damages first, either minute or colossal and the necessary repairs and improvements that followed along with the position of the investors, realtors, consumers, in it all.
The Discouragement of the Overseas Pakistanis
Overseas Pakistanis prefer to invest their hard-earned money in real estate,
With the purpose of having an abode to return to.
They want their options open, so an opportunity such as the real estate seems fitting.
Most of the first rate housing societies in major cities like Islamabad, Karachi and Lahore have already captured their interests by the provision of the splendid lifestyle they are accustomed to.
The year of 2019 did not invite many investments from abroad. The Overseas Pakistanis have known of the issues going on through the power of social media. The economic and financial issues that arose brought with them the loss in the property sector and the lack of interest of Overseas Pakistanis to invest.
Importance of the Investments by Overseas Pakistanis
The investments of Overseas Pakistanis are crucial for the growth of Pakistan as they fall in the category of remittance. The larger the remittance, the higher the value of Pakistani Rupees will be and then it can compete against the US Dollars.
Remittance inflows can contribute remarkably to a country’s economic well-being. A study conducted by Abdul Qayyum has shown that Pakistan’s remittance inflows help in not economic growth and also in improving social conditions. Districts like Sindh, Punjab and Baluchistan, have reaped the benefits of remittances to Pakistan.
And now the real estate sector analysis in Pakistan includes a big success, Pakistani Rupee traded at the highest value in nearly one year. In August 2020, the trading was at the lowest point, the rupee posted an improvement of 71 paisa’s on 3rd March 2020, closing at PKR 157.13 to the USD in the interbank currency market. This will attract our foreign investors and Overseas Pakistanis and keep them dedicated as their attention is ours.
With new policies and developments taking place, there is another benefit set in motion for the Overseas Pakistanis. For the expats, the income tax returns have been made flexible.
Untaught Property Dealers
The real estate market has been overtaken by uneducated agents and dealers who don’t have the know-how of the world of real-estate, so they misguide people and in most cases lead to cases of frauds. There is a need for a Federal and Provincial Real Estate Authority in the country that could help protect the rights of land allotters.
The development and construction of societies by the builders must be overseen, it takes many years to complete the land consolidation process. Taking the aid of some real estate regulatory authorities to oversee the developments will strengthen the confidence of people, especially overseas Pakistanis to invest their money in this sector without having any fear of scam.
This issue has an important place in the real estate sector analysis in Pakistan as it has affected progress in its own little way. Sometimes, it’s the tiny sparks of fire that are ignored, but it is capable of setting fire to the entire foundation. To prevent this, we atSigma Properties are at your service. We shall provide you consultancy free of greed or any bad intention that is thinkable and shall point you to the right direction.
Previous Tax Rules versus the Present
The CGT or Capital Gains Tax is a tax that the seller pays and the capital gains refer to the profit that one makes from the sale of any property. Formerly, tax on capital gains or profit earned would be charged on the basis of how long one holds one’s property. For instance, if you buy a property and sell it within three years, Capital Gains Tax rates
For the first year would be 10% on the gain
For the second year would be 7.5% on the gain
For the third year would be 10% on the gain
If you chose to sell your property after three years, no further CGT would be applied. This system had a negative impact on the holding period, which is the time that an investor keeps the property for himself. The holding period had become really short and properties were bought merely for the purpose of resale.
All of this is gone. Now, the tax on capital gains will be applicable after 4 years of having kept the property with you. This new reform is in the best interest of the investors as the holding period has been made manageable for them and those who are buying property for the sake of setting it aside for years.
This has begun to strengthen the pillar of real estate in the nick of time.
The Absence of Relief Packages and Incentives
There is a dire need for incentives to keep the investors engaged with the real estate dilemma. In the previous years, there were no proper incentives offered to the interested parties, so lesser development took place.
Recently the government has provided new schemes and packages. The construction relief package is one of the main ones. The President of Pakistan has recently enacted the Tax Amendment Ordinance 2021 to facilitate the construction sector of the country. It has been effective from January 1st, 2021. The deadline for availing the government’s special construction relief package from 31st December 2020 till 30th June 2021 has been extended due to this ordinance.
Now, builders and developers can easily get their projects registered under this tax amnesty scheme, which provides them immunity from disclosing their sources of income as well as availing the fixed tax regime. The deadline for the completion of projects is now 30th September 2022, instead of 30th September 2023.
This gives the real estate sector analysis an edge as the real estate investors can now enjoy the immunity to disclose their funding sources as well as the facility of fixed tax regime because of the extended deadline. It was 30th September 2022 and now it is till 31st March 2023.
The Tight Regulations of the FBR
The Federal Board of Revenue, FBR receives information about your income, the investments you have made and real estate transactions. FBR will match up your income with the filed tax returns and if there is a disparity, they will send you a notice or they will charge you a penalty fee. They might freeze your assets too.
In the past, FBR had targeted the non-filers, those citizens who do not file a tax return by the required date. There was an imposition of a ban on non-filers buying property worth more than 5 million unless they register with the Federal Revenue Board (FBR). Apart from this, FBR’s tight regulation on non-filers’ banking transactions, and the levying of high property transfer taxes discouraged investors from putting their money into the sector in 2018-19.
The FBR has lifted these bans now and the non-filers are availing this to invest large sums of money into the real estate sector. This is greatly contributing to the success of the real estate sector which is indirectly lifting the overall economic situation as well.
Conclusion
Being a developing county, Pakistan’s real estate is facing its battles. Not all of them are lost. The real estate sector analysis in Pakistan shows interesting movement and momentum. The Pakistani Rupees’ appreciation and the falling Dollar prices is a big achievement. It may not have been due to economic strength, but it is bringing in strength of a new kind. It puts Pakistan ahead of the game, in a supreme place where the world applauds it.
The new policies and packages introduced are lifting the real estate sector too because they contain benefits for the working class and the investors as well. All of this will result in more investments from abroad and within the nation. In 2021, the industry of real estate will exceed expectations, as thePakistan Real Estate Forecast 2021says so as well.
The economic development of Pakistan is a foundation and the pillars of it are the various industries, the most important of which is the real estate. The size of Pakistan’s real estate assets is between 70 to 75 percent of the total countries’ wealth. Currently, the Pakistan Real Estate forecast has knocked on the door of brighter expectations.
But first, what charm does the real estate have for us? There is a concept amongst most Pakistani individuals that if you invest in real estate, you will never lose your money, it will always give you profit, whether it is after two years or three years. In terms of investments, property truly is the safest investment option.
It is a passive income source. If you are unemployed but have property of any kind, you will not need to worry about the expenses the next month would bring.
There is a flexibility of selling all of those you own in times of crises.
You can always choose to move into the house built on your property.
There is an opportunity to build equity.
So in short, the safety is having a roof to rely on at any time.
Most families in Pakistan often invest in property keeping in mind the next 10 years to come, if they have large sums of property in remote areas, they are inclined towards selling all of that property and buying a property that is less in land mass but in a more suitable location. For example people who have had properties in regions like Bannu or Dera Ghazi Khan or anywhere that is considered a remote area, they are now inclined towards selling those properties and buying something in more commercial, currently functional societies in major cities such as Islamabad, Lahore or Karachi.
The Condition of the Real Estate in the past
In 2019, the property sector suffered a little because of several financial, economic and political challenges. Nonetheless, 2020 began with a global economic meltdown due to Covid-19, but it has ended on an entirely different note.
The Real Estate of Pakistan in 2020
2020 brought with it big surprises, both good and bad. The property sector is a fragile entity, one that pays for the harsh winds that blow. And so, in the beginning of 2020 the image was not as appealing one, but it ended by leaving numerous advantages to the people involved in this sector.
The government introduced several packages which proved to be the best for the real estate industry of Pakistan. The amnesty scheme, construction relief package of PM Imran Khan and the new policies for the sale and purchase of property have had a positive effect on the country’s properties. The government also announced that people are allowed to construct projects and houses without declaring their income source, which led to an increase of 20% to 30% in the property prices.
The Current State of the Property Sector
The prices of property are in a stable position since the last two months of 2020. On 31st December 2020, the government of Pakistan has declared that the construction relief package shall be continued throughout 2021. This announcement has ensured that the road to success will not have any ditches or thorns and the prices of the property have started increasing again. The cloud of uncertainty is still upon us as the property prices are showing a highly risky behavior, so investments must be made with proper attentiveness.
During the initial days, the construction relief package only focused on development and construction of the plots. But now, the societies have started developing non-possession plots and have announced possession so that investors can quickly start the construction of their projects.
The prices of properties will increase till April 2021, it is an expectation hanging in the air. Hopefully it will turn out to be this way.
Housing Industry in Pakistan and the Real Estate Market 2021
Imran Khan, since the time that he become Pakistan’s prime minister, has made several reforms and improvements to Pakistan’s real estate sector that are directly related to Pakistan’s economy in many ways, such as:
Most of these changes have been implemented to raise government tax revenues.
Prevents speculative purchases in the real estate industry.
As a result of these changes, there has been less investment by investors in Pakistan’s real estate industry as a result of which Pakistan’s economy is in a critical situation.
Real Estate Forecast 2021
2021 is said to be an interesting year for the real estate sector of Pakistan. This year will be highly beneficial, but we have to consider the many factors that are to come out with this real estate forecast in 2021. The important factor here is that our government seems to be more focused on constructing real estate projects.
So, the prediction is that 2021 will be a year where more undeclared money will be an investment in real estate. It will be a profitable year, especially for the ongoing construction projects and the possession areas.
Overall, 2021 will be the golden year for property investment.
At Sigma Properties, we have been in awe at the little seeds that our construction projects have sown in 2020, these projects are rising and are gaining momentum in 2021. Projects like Capital Smart City, Lahore Smart City, Nova City Islamabad and Taj Residencia are performing exceptionally well as investment realization continues to expand.
The new real estate market is very suitable for a industrious Persons. I would recommend that you use our advisory services for future investment purposes. It is a reasonable price to pay for choices that will help you make millions, and we will strategically plan your goals with you in advance and help you manage your savings.
Sigma Properties will provide you with a platform where all the best investment opportunities are available. Your investment will be safe with us and we guarantee a return with huge profits. So to avail the advantages that the year of 2021 is bringing, consult with us to meet your residential and investment needs.
The business deals with the buying and selling of land, property, or building. There is a group of people required to gather for forming a real estate company, some of these experts include civil engineers, architect designers, licensed directors, and so on. The real estate industry never gets out of fashion because it is always in demand of buyers and the development also keeps going on. Different regulations are followed in every country concerning their real estate industry rules. In Pakistan, this industry keeps immense importance as it has a great share of the GDP. The consultants involved in the activities of the real estate company in Pakistan are termed as real estate agents, property advisors, and sometimes called property dealers.
Scope of real estate business in Pakistan
The real estate industry holds immense importance for every country in general. However, several benefits are specifically gained by Pakistan in all the years throughout. Some of the points that elaborate the scope of real estate business in Pakistan are mentioned below:
The increasing need
There is a great scope of the real estate business in Pakistan. Many other sectors of business rely on the expansion of the real estate industry. The growth of the real estate industry in that specific country is then again dependent on several other factors.
The money spent
There is almost around a billion of money spent on the development of real estate projects each year. The worth of the real estate sector in Pakistan holds immense importance, in numbers, it is stated to be somewhere between a dollar 300 to a dollar 500 billion.
PSB Analysis
According to the report analysis of the PBS also known as the Pakistan Bureau of Statistics, the account of construction output holds 2 percent of the overall GDP of the country.
Urbanization needs
The major need for expansion in the real estate industry is because the country Pakistan is in the development stage. However, the greatest need at this time is the boost in the work of every industry that supports a country´s economic growth.
Legal checks
The real estate companies may make sure that the dealings of the property are done by all the legal means. This check and balance are done via the authorities such as the development authority of that specific region.
Helping residents
The real estate industry has a lot of working companies working in the field. This is eventually helping all the residents who need the home. Not just the consultants are provided to guide the buyers well but the tax heavy residents are given the option of an easy payment plan so that they make the payments very easily.
The development of the country
The country is getting strong support from the work of real estate companies. This is done in such a way that rapid development is done all over the cities. This is return is increasing urbanization along with the benefits of being a tourist attraction.
Economic development
The real estate industry also directly and also indirectly helps in the economic development of the country.
Investors are greatly benefited
The investors are making a lot of money by renting out their properties. The investors may also make a huge amount of money just by reselling their bought property. This way of making money is the easiest as there is not much hard work involved.
Stabled cash flows
One of the other benefits of the real estate industry that Pakistan gets is stable cash flows. These are some of the benefits of real estate businesses in Pakistan. However, there are several more to these depending on the kind of real estate kind and the time. Such as in the times of the novel coronavirus the real estate has flourished a lot in Islamabad and Lahore specifically.
Conclusion
As explained above the real estate keeps immense importance in most aspects. The real estate industry is never getting out of trend as the development of societies and urbanization also keeps going on as a continuous process. Moreover, the demand will also always stay as everyone wants a house for their living.
The real estate industry is a thing that never gets outdated. Each day there are millions of people all around the world who are in search of the property. When purchasing a property, everyone desires a consultant who can guide them well. However, several things are different with the regions, such as in Pakistan certain specific things that may guide you on how to become a property dealer in Pakistan.
Such consultants are required to acquire a piece of sufficient knowledge about the area they deal with. The real estate agents not only guide the people about the property, but they are also helping people in getting the knowledge about the future of their invested amounts. As the purchase of the land or a ready-made property involves a very huge amount of money, the investors are very particular about the dealers and their firm knowledge.
Generally, there are a lot of real estate agents that are in practice, but not everyone gets the success. This is because others lack the skill in this field.
How to become a property dealer in Pakistan
There is a list of several things that may help you know that how to become a property dealer in Pakistan. If you follow these tips and tricks, then chances are that you may become a successful property dealer in the country. Some of these are precisely explained below:
Sufficient knowledge
The real estate agents are required to have sufficient knowledge about the property dealings. They should be efficient enough to recommend to the customers the different ways they can invest their money. The investors can have general knowledge from the internet or the word of mouth, so a property dealer should have knowledge that is a step ahead of this.
Updated education
The property dealers can be efficient and much more productive with their job only if they keep their knowledge updated on this subject. The property prices keep going up and down, also new developments and restructuring keep happening. The real estate agents are expected to have the most updated form of knowledge.
Tenacious
Real estate agents are required to have a firm hold on the dealings they make. To become a property dealer in Pakistan and to be efficient at your work you are required to be tenacious. People are always looking for a dealer that is unbeaten at his work and stays firm and persistent throughout. Keep follow-ups meanwhile also after the deal is done.
Better communication skills
It is not just the vocabulary that needs to be better, but the dealer is required to have the skill of explaining his knowledge in the best possible way. The property dealer must possess the fine skill of guiding a customer the best. This may include the way of convincing the investor in such a way that it stays a win-win situation for both.
Technological knowledge
One other effective way that indicates how to become a property dealer in Pakistan is to have the necessary know-how of the technological aspect. The property dealers may use the technical knowledge of the up-to-date market to help their clients and sell the property.
Hard work
The hard work is not only about this field, but generally, for any success, the hard work pays off. Hence, one thing suggested for the real estate agents is to be fast, efficient, and hard-working.
Honesty
The best way to become a known and reputable real estate agent is, to be honest. Being honest with dealings will not only make the dealer a trustworthy agent but the future of his career also depends on this. For instance, a property dealer with a corrupt background will not be demanded by anyone. Eventually, his worth will decline in the field. The most wanted thing by an investor and the buyer is the unbiased property dealer. This is to avoid future circumstances.
Strong connections
To become a property dealer in Pakistan, the agent is required to have strong connections and representation. To be successful in the real estate industry, a property dealer should have strong connections. They may have a list of potential buyers who can use it as a resource for future dealings.
Attention to the details
One most important thing that is needed to become a property dealer in Pakistan is to pay very close attention to every detail. No property dealer can be efficient at his work until and unless they are attentive throughout. As seen, the property prices keep changing and so do the tax laws, infrastructure, and zoning rules hence, the dealers are supposed to have the best knowledge of all this so they can guide the customers.
Conclusion
As suggested above, these are the few things that guide on how to become a property dealer in Pakistan. The real estate industry has always got ongoing processes, and it requires its agents to be fast enough to move with the changes.
Sigma Properties is one of the most successful names in the industry. They have a record of fair dealings for the past several years.
Real estate is an industry that deals with property. It is a business of selling and purchasing properties. It credits this industry that the cities have developed a lot. Some specific laws and regulations are followed by each country and this is how each of the real estate industry differs from country to country.
In Pakistan, as stated by the government, the real estate industry has been emerging rapidly. There are civil engineers, architects, and a certain more skills that are required in this field. One of the major proofs that Pakistan is emerging in this industry is the development of lavish societies.
The people in Pakistan who work with real estate companies are termed as property advisors, real estate agents, or property dealers. Real estate registration Pakistan has some specific rules that are mandatory to be followed by everyone.
Requirements of real estate registration in Pakistan
As mentioned earlier, the laws of the real estate industry differ from country to country, Pakistan also has its own rules in this regard. As a real estate company in Pakistan, it is required for the real estate company must be registered before carrying out its functions. The people involved to work in a major role may get their certificate from the relevant authorities.
In Pakistan, the Real estate industry acts as the backbone of the economy. Real estate registration in Pakistan requires the company to have the hierarchy designed with:
At least 2 directors.
At least 2 shareholders.
An authorized amount of capital worth Rs. 1 Lack.
A physically present infrastructure as a work-station.
The ID proofs of the designated directors.
Procedure of real estate registration in Pakistan
The procedure that is required to be followed by the real estate firm in Pakistan has the following steps:
The designated directors of that specific company are required to get their SECP login credentials. This will ask for their contact information and a little information about them.
Secondly the company name will be analyzed by the authorities. Security and Exchange Commission of Pakistan also known as the SECP will see if the decided name of the company is available or not.
The third step is to apply for the company incorporation. In this step, the form needs to be filed on behalf of the company´s information like office location, people affiliated, capital information, and so on. This document shall be submitted along with the 4 documents that are:
National identity cards of the designated directors.
Article of association.
The letter of name availability that is received by SECP.
Memorandum of association.
After these steps, the main step is to submit the application to the office of SECP for issuance of the company´s “registration certificate”. This will require the fee of the registration procedure.
The Registrar may then give the time required to process the “incorporation certificate”. After the issuance of the incorporation certificate, the company is asked to:
Start a bank account operating under the name of the company. This account is recommended to be in the commercial bank.
The amount of paid-up capital is asked to be deposited in the designated director´s bank account.
Then the auditor may provide the consent form for depositing the amount of paid-up capital.
This consent shall be submitted to the office of SECP.
Then finally the company can go to the Federal Board of Revenue. There, at the Regional Taxation Office, the company can get itself registered for taxes like:
Income tax registration.
Sales tax registration.
The mentioned procedure above is step-to-step guidance for any company that wants to work in the real estate industry of Pakistan. Generally stated, the worth of the real estate industry in Pakistan is around 4 billion, whereas the construction output lies around 2% of the overall GDP of the country.
Conclusion
The real estate companies in Pakistan account for a lion’s share in the GDP. The real estate registration in Pakistan is an easy procedure as explained above and the real estate company must get itself registered legally before any functioning. This is also to avoid the future consequences that are faced due to the illegalities.
Everyone in the world is earning to get a better lifestyle or at least to support their necessities. One of the most basic needs of everyone is to have their own house. As we know that most people in our country are tax heavy so it is merely not possible for them to buy a house all at once.
Buying a house requires one to have a huge amount of money so the payment is made easily. Some people buy a ready move-in house and some buy an empty plot where they build up their own designed house as desired. However, in each of these cases, the buyer needs to have a lump sum amount of money.
Steps to buying a house for the first time
If you are one of those citizens who are now planning to make a house of your own, then with all our support you are highly recommended to make this move as soon as possible. Just by keeping into consideration a few of the important things, you can make the best decision of your life.
As mentioned at several places, we are pre-drilled with the idea of saving a part of our earnings for any needed time. One of the best ways to do this is to buy a tangible possession with it. This will not only have the money saved but also the investments will be made that may give profitable returns in the future.
There is a list of several things to consider when buying a house. The first time home buyer tips are specially made for the people making this decision for the first time.
Islamabad is one of the most beautiful cities in the country located in northern Pakistan. It has highly emerged in the industry of real estate, the rules and regulations are quite strict there and prominently because it is a capital of Pakistan so it is well developed as compared to other cities.
There are a few things to consider when planning to buy a house. Some of the 1st time home buyer tips are mentioned below:
Consider Islamabad
If you are planning to buy a house for living or investment, then Islamabad is the best option for you. There are several reasons why this city is a preferable option. Such as
Since Islamabad is the Capital of Pakistan, it is a well developed city.
Islamabad has also recently emerged in the real estate industry and a lot of projects have been developed in the city.
The climatic conditions are favorable in Islamabad.
The city is clean and least polluted.
The property prices are comparatively lower than the other cities.
The profitable rate of returns on investment is guaranteed.
Lookup for the best location
The location of the house keeps immense importance. This is because the prime location brings along a lot of benefits. The accessibility of the several desired places should be easy from the place where you are living, or else the long transportation hours will cost you time and money. There is no matter if you have a beautiful luxurious house in an ugly area or an area without any facilities nearby. This will cause you trouble by the time you will reside there and in the future, if you ever plan to resell it then hardly any buyer would be interested. Hence location is perhaps the most important thing to consider when buying a house.
Appropriate neighborhood of the house
When scouting a location of the house, a little inspection of the neighborhood also keeps immense importance. A friendly neighboring environment will not only give a good residential feel but also is a great ease to the mid-on the contrary, an inappropriate location with an unsafe environment in the surrounding can cause endless troubles.
Infrastructure of the house
If you are buying a ready move-in house then it is recommended to access the infrastructure of the house. The ventilation, pipeline supplies, electricity connections, and similarly much more. However, if you have bought an empty plot then even these things should be kept in prime consideration. The added features in the house may bring luxury but unless there are comfort and basic amenities available there is no use for the luxury.
Price of the house and it’s worth
Whenever you buy a house, the prices are recommended to be compared with the worth of other things that come along. Such as the location, facilities nearby, supply of basic amenities, and much more. If the price you are paying for the house is paying you a good worth in return then it is fine to buy it, or else you may avoid the option.
Timing of purchase
The most important tip is to consider the time of purchase. For instance, the most appropriate time to buy a house in Islamabad is these days. The reason is that many real estate residential projects have recently been developed. The new houses along with low prices are the two most intriguing factors for the buyers. All these real estate developments are done with the least flaws, the developers and designers have kept in consideration all the factors that benefit the residents. If you are looking for a house to live in yourself or you wish to buy it for investment, then currently there are many options available in Islamabad.
Conclusion
These are some of the tips mentioned above for anyone who is buying a house for the first time. However, there are several more that can be added to the list depending on each individual´s plans and preferences. In general, the city of Islamabad is highly recommended to the buyers as there are so many admirable projects recently developed. Some of these include Park View City, Capital Smart City, Taj Residencia, Blue World City, Bahria Town, and Eighteen Housing Society.
