Post-pandemic real estate dynamics.

Byline: Muhammad Omer Dogar

THE government needs to realise that its two primary goals, five million houses and 10m jobs, will remain just a dream unless the real estate sector does not revive. The global ecoAnomy is projected to contract sharply by 3 per cent in 2020. The reform in the real estate industry presents a unique opportunity to revive economic growth.

Covid-19's impact on the real state sector varied as the demand for residential flats and small houses is likely to increase whereas the demand for commercial property and luxury houses will decrease. The work-from-home concept has made the corporate world realise how they can save their operating cost/rents on commercial properties. This will also bring changes to the future planning of houses which will now include space for work. No impact is anticipated on agriculture land and plots in good, developed societies. Real estate is traditionally a low-risk viable investment for medium- and long-term investors.

Post pandemic a new development approach is needed. Building markets, opportunities and good governance will ensure economic uplift, stability and social cohesion which will lead to a sustainable and long-term solution. We can understand the significance of real estate and its snowball effect on the economy through the study of the Dubai model. Realising the need of the hour, the United Arab Emirates government initiated a 10-year residency visa programme in specific industries along with five-year retiree visas. A pickup in longer-term residency is likely to fuel demand for real estate investment.

Pakistan's real estate market remains the backbone of its economy, with as many as 50 different industries relying on it. This sector is also the second-largest employer within the country, with the first being agriculture. Furthermore, we should not undermine the significance of real estate in towns/district level as everyone cannot afford to move to cosmopolitan cities. According to a World Bank estimate, the size of a country's real estate assets constitutes between 60 and 70pc of the country's total wealth. Despite these facts, real estate contributes only 2pc to the national GDP. Why is this the case?

There has been a slowdown in real estate since 2017 because of political instability, the uncertainty of economic policies, absence of incentives for the investors, the imposition of ban on non-filers to buy a property worth more than 5m and levying of high taxes. The government's...