Analyst Opinion
The Real Estate market in Pakistan is experiencing significant growth and development in recent years. Customer preferences:
Trends in the market:
One major trend in the Pakistani real estate market is the increasing demand for housing in urban areas. Rapid urbanization and population growth have led to a shortage of affordable housing options in cities, resulting in a surge in property prices. This trend is expected to continue as more people migrate to urban areas in search of better job opportunities and a higher standard of living. Another trend in the market is the rise of gated communities and housing societies. These developments offer a range of amenities and security features, attracting buyers who are looking for a higher quality of life. The demand for such properties has increased significantly, leading to the development of new housing projects across the country.Local special circ*mstances:
One unique aspect of the Pakistani real estate market is the prevalence of informal and cash-based transactions. Many property deals are conducted without proper documentation or through informal channels, making it difficult to accurately assess the true size and value of the market. This informal sector poses challenges for both buyers and sellers, as it can lead to issues such as fraud and disputes over property ownership.Underlying macroeconomic factors:
Several macroeconomic factors are driving the growth of the real estate market in Pakistan. One key factor is the country's strong population growth, which is creating a demand for housing and commercial properties. Additionally, the government has implemented policies to encourage investment in the real estate sector, such as tax incentives and the establishment of regulatory bodies. These measures have attracted both domestic and foreign investors, further fueling the market's growth. Furthermore, Pakistan's improving economic stability and infrastructure development are also contributing to the growth of the real estate market. As the country continues to invest in infrastructure projects, such as roads, airports, and public transportation, property values in surrounding areas are expected to increase. This presents opportunities for investors and developers to capitalize on the growing demand for real estate. In conclusion, the Real Estate market in Pakistan is experiencing significant growth and development due to customer preferences for property investment, increasing demand for housing in urban areas, the rise of gated communities, and the prevalence of informal transactions. These trends are supported by underlying macroeconomic factors such as population growth, government policies, economic stability, and infrastructure development. As the market continues to evolve, it is important for stakeholders to navigate the unique challenges and seize opportunities for growth.Methodology
Data coverage:
Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.
Modeling approach / Market size:
Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.
Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.
Additional Notes:
The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.
