Great times for housing real estate in Pakistan

11th April 2022

Investing is not an overly complicated process if you have the basics right. Everyone wants to be like a techie, sitting in front of the computer, clicking or typing away, and making money. But the reality, as many have already said, is quite boring.

It requires research, grit, and also knowing one’s own preferred style of investing which can be based on the ability to take the risk, family background, available resources, aims, and so on. I myself have always been interested in seeing opportunities arise through reading macroeconomics and wider trends in the economy. Without a doubt, I read a lot and my intuition (the ability to see patterns) plays a role as well. This doesn’t mean I am Nostradamus, or that I can actually make money in the markets. However, I can write about what I feel are good opportunities.

In 2012, it was quite obvious to me that the US is a great market for real estate investment. At the same time I predicted that by the end of the decade, Pakistan’s water issues will be worse than its energy issue. Around the last Pakistani elections, it became obvious to me that the USD would be a good investment and real estate a not so good one. Just after the elections, I wrote about how adding weight to textile investments in a PSX wide investment portfolio would create a good return.

Right now, February 2021, I believe we are in a situation where we are awaiting a bounce back in real estate. There are many reasons why I have conviction and many ideas converge here.

1-Bounce back from corona will give strength to all markets, as well as construction and real estate (medium conviction/medium risk)

2-The reorganization of the Pakistani economy should reap benefits in the future (low conviction/high risk)

3-Introduction of the Naya Pakistan housing scheme and focus on Pakistani housing financing by the government (high conviction/low risk)

The first 2 are good enough reasons but the 3rd point brings it all home. Without going into details of legal bank financing requirements and all, we know that there is going to be a massive flow of money into housing and therefore a boom in at least residential real estate. Growth in construction of course will follow.

The Pakistani government has already started supporting at least the speculative side of real estate investment by easing the wealth declaration requirements. I believe this is just a nudge the real growth is to follow as Pakistan transitions into an economy where Housing finance starts to play a serious role. Again, I am talking about residential real estate here which, it feels to me, will be where the actual boom will come. There will be negatives to this shift, but from a speculative or savings point of view, people will make a lot of money.

This will not come without its risks for the wider economy, of course, but for the foreseeable future, I believe, this will just add fire to the long-term trend of real state price growth in Pakistan. Real Estate, again will be one of the best investments in Pakistan, 2nd perhaps only to the PSX.

All of the above is conditional to Pakistan's economy remaining sustainable. At the moment, we are on the brink, teetering on a debt situation that may be hard to manage (thanks to double defecits and NOT the Chinese), but I believe Pakistan will pull it off. Regardless, for Pakistani residents earning in Pak Rupees, this will be one of the best investments out there.

Umair Usman is a Rapid Transformational Therapy Practitioner, a businessperson, and a blogger. You can know more about him at www.thecognitiveconsultants.com. To book a free consultancy session, please fill the form here

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