KARACHI: Real estate is subject to the rudimentary economic laws of supply and demand. However, despite its growing demand and immense business value, its supply remains highly superficial, impulsive, and swayed by developer biases.
According to a report, the country experiences an urban housing demand of 350,000 units annually, of which only 150,000 are met. More than 60 per cent of this demand comes from low-income strata, whereas the bulk of the supply is catered to the middle to upper-middle income groups.
This vast disparity is a direct result of unregulated markets, lack of research, and strategic planning for future growth. Had Pakistan’s real estate been built using a data-backed and use-case approach, we wouldn’t have a plethora of empty buildings sitting in the center of major cities.
Over the years, Pakistan’s real estate industry has seen a steep rise in momentum investing. Developers and builders invest huge sums of money on commercial projects while ignoring the housing deficit the country inherently struggles with.
Since commercial properties are high-yielding items and tend to fetch tremendous value quickly, most developers vest their interests in projects that have high turnover in shorter timelines. The situation is further convoluted by the minimum to no-regulation in this sector, allowing real estate developers to make their way with the system with complete impunity. This is one of the biggest problems that are diminishing the residential housing supply.
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