Real estate roundup

Last time, the column talked about the real estate sector was when it discussed the second phase of property valuation coming up in July 2017. While the budget 2016-17 revamped the valuation and tax regime for the property sector. The Budget 2017-18 has been uneventful for the real estate sector.

However, the property market has been sluggish of late. Where the activity had been quite slow in May 2017 as the investors cautiously awaited budgetary changes, June 2017 too saw a lull because of Ramzan. A similar laziness was seen last year when the property market finally saw a drive to bridge the gap between the DC rates and the actual fair market values. Apart from increasing the base for taxation purpose, the FBR also increased the Capital Gains Tax (CGT) and Withholding Tax.

Still, there might be some takeaways from the budget 2017-18 for the real estate sector. Not directly calling for investment in the property sector, the overseas Pakistanis are encouraged to invest in the development and infrastructure of the country via Capital Development Authority (CDA).

Now that the budget has been announced and Ramzan is over, let’s see if the market gains momentum; a key inhibitor for now could be the second phase of property valuation expected in July 2017. According to Zameen.com, the property portal, the property market that saw tepidness in May 2017 are expected to bounce back after Eid; and more than a downward trajectory, “stability prevailed in most places as investors and genuine buyers both took a step back from the market”, says Zameen Media (Pvt) Limited’s editor. The largest online property portal points out towards a rising trend of investors moving away from Karachi and flocking to Gwadar.

Lamudi, another property portal highlights the potential of the sector for the foreign investors in its 2017 Whitepaper-State of real estate Pakistan 2017, “Pakistan is now primed for foreign investment in real estate. Work has already begun on the $51.5 billion China-Pakistan Economic Corridor and the benefits will flow to the real estate industry… As the new tax laws make the real estate market more transparent and regulated, overseas investors will continue to pay close attention to the market.”