What is Real Estate Investment?
Are you unaware of how, when, or where to invest? Then you are in the right place. Real estate investment is one of the most beneficial yet profitable investment opportunities in an entire country. Real estate investment is that you have to buy a property after consulting your real estate agent. However, it is more likely to get gain than to lose. The property market of Pakistan has come to light and become a major contributor to the socio-economic development of the country. This is considered as the best way to secure money for a long period and also being profitable, the outcomes are always in support of gaining-good in return.
Factors Affecting the Real Estate Market:
Before heading towards real estate investment, you definitely need to have knowledge about some factors that affect the real estate market. Here is the list of some important factors.
- Demographics
- Taxes and Budget
- Opportunities for Employees
- Overseas Pakistani’s Investments
- Interest Rates
- Regime Policies
- Belief in Market
Demographics of Country:
Demographics of a country play a main role in terms of buying, selling, or renting purposes. The real estate market is directly affected by some categories of demographic data like the socio-economic status of the generic population, it depends on the earnings of people likewise, whether they belong to middle class or elite class. You either be searching for a big house for a joint family or small house for just 2-3 individuals, it depends on the divisions of family systems.
The one is a nuclear family that possesses a small apartment or house, the second one is the joint family system which requires a huge house apparently. So in that case, Pakistan’s property has great value and demand which is affected by divisions. Hence, the Pakistan real estate market is directly affected by the demographics of the country.
Taxes and Budget:
Pakistan property market was in serious economic crisis for a decade but 2019 was a turn over for Pakistan real estate market and the economy as well. Eventually, the cost structure of property requires a budget and it depends on the increased or decreased prices of raw materials for instance; cement, bricks, or fixtures etcetera. The prices of the house can go down easily if the low-cost raw material is used. In that case, lower the cost of construction, lower will be the business. So if the budget is low, the Pakistan real estate market will fall.
Tax rate:
- Withholding tax rate has been decreased from 2-1% on rooted properties
- Withholding tax collection on buying property disregards of its market value
- Withholding tax collection on selling property, where the holding property is remained above or below 5 years
Opportunities for Employees:
Do you want to know how much the employees get benefitted by the opportunities they have been given when it comes to real estate sector? You probably need to know that the proportion of the country is directly related to the ‘employment to population ratio’. The financial independence shows the high employment ratio which means more employed people will be more financially stable. Hence, the prices will become affordable for them in terms of buying or selling house.
Overseas Pakistani’s investments:
Overseas Pakistani’s have always made handsome investments to our country’s real estate sector and surely played a vital role. Some major developments like the Naya Pakistan Housing Scheme where houses are being constructed in multiple cities around different cities of Pakistan.
How to make friendly-relation with investors?
The basic aim is to make investor-friendly relations and welcome the overseas Pakistanis in a world of real estate sector. The investments are highly profitable and whenever someone invests, they bring resources inside your country for instance; Money, technology, and machinery etcetera. So it is considered one of the biggest factors to bloom the real estate market.
Interest rates on properties
Interest rates on properties play a critical role in the growth and development of the real estate market. Well, you know in some ways interest is forbidden and people don’t really invest along with interest. The buying property depends upon interest rates, which means the slight change in interest affects the trend of real estate market. This major factor would let people find another business rather than investing on real estate market.
Due to the socio-economic and political situation of the country, Pakistan’s stock market varies quickly, which results in the up and down of the real estate market, eventually, the graph comes down in terms of high-interest rates. Lower the interest rate, greater will be the value of property in Pakistan.
Regime Policies
Policies made by the government play a main role in the development and growth of the real estate sector. The support in reducing taxes and subsidies can be beneficial for the investors and also for the betterment of the infrastructure of Pakistan. Moreover, foreigners might get attracted to invest here. So basically the relation should be friendly or else people will not invest in it here.
Belief in the Market
The most important factor is to create a better image in the market, real agents are supposed, to be honest, so that investors can fully trust them. As it is all about savings of people and they think twice or thrice before even investing so it is the duty of builders and developers to develop trust among people or frauds would not let people invest in the real estate market.
Conclusion:
These are the factors that greatly affect the market of real estate and in terms of any mishaps while buying or selling properties, the market will go down. You are required to have knowledge about demographics, taxes, and budget rates, the opportunities are given to employees, and government policies etcetera before investing. As we know that the real estate market is getting better and we can clearly see the bright future of this market, so do not hesitate or think twice or thrice because we care for your savings and future as well. So just find out a professional real estate agent and try to have firm faith. Happy investing!
