A strong start to the year for property and real estate sales in Pakistan is now erased by the novel coronavirus outbreak. However, Prime Minister Imran Khan has announced an incentivized relief package for the construction sector and granted it the status of an industry. The construction sector or industry from now on will resume the activities from April 14 to support the economy and create employment opportunities as well.
PM Imran Khan's Announcements for the Construction Sector
Before we move to the original topic of our discussion, it is important to discuss the pointers for your knowledge.
- No declaration of income required for those who invest in the construction sector.
- Tax on the construction industry to be levied on the Final Tax Regime (FTR).
- Sales tax on construction material except steel and cement to be lowered.
- Construction Industry Development Board to be established for the promotion of the sector.
- Industry status granted to construction.
- Government to pay a subsidy of PKR 30 billion on the Naya Pakistan Housing Scheme.
- Capital Gain Tax not to be applied to those who are selling properties.
These announcements have been lauded by the real estate developers, agents, and associations across the country including the Association of Builders and Developers (ABAD). Not only will this package help in creating more employment opportunities, but it will prove to be a huge push for capital investment in the real estate industry in the country.
Due to the coronavirus outbreak, like so many industries, people associated with the real estate have to be more creative and innovative to make sure that they are not left behind in the business circle. The buyers who were in the market several weeks ago are still looking for their new address, and sellers are still counting on literally moving on.
What’s the Future for Real Estate in Pakistan?
Currently, there are two theories or frame of minds existing in the real estate market. One school of thought is that the real estate sector will undergo a huge depression phase and it will take time to recover. The reason for this frame of mind is that all the industries will be undergoing a depression phase and no one would want to invest in a sector that does not give instant returns. People will hold on to their money and invest when they feel the situation is feasible.
On the other side, there is a frame of mind that thinks that the real estate sector will experience a boom because the buyers will rush to the market who have been sitting idle due to the COVID-19 pandemic. Due to a large number of buyers, the prices are expected to increase. No matter what happens, the spring season, which is the hotbed of investments will be fruitful. Real estate associations also believe that the coming few months will be extremely crucial for the real estate industry. In this time, the role of property portals is also very important that can help people provide virtual tours of mega projects in a comprehensive manner.
The announcements made by the PM, especially that related to no disclosure of income, will make way for a huge investment in the real estate industry. The construction sector will start working and as much as 40 other industries will start getting business because of this revival. Although cement and steel businesses are not a part of this package they will get their fair share of business because of the resumption of the construction activities in the country from April 14.
What do you think where the real estate sector, now an industry, is heading? Let us know in the comments section below.
