The housing market around the world has experienced a shift over the last two decades. The fusion of digital and reality has transformed the real estate sector – particularly for end-users. What the developed countries experienced in the first decade of this century, the developing countries like Pakistan started to experience in the second decade.
The last two decades have seen incredible developments in Pakistan’s real estate sector. One could divide it into several distinct phases. All of these have converged and changed the outlook of the market.
The rise of luxury housing
The return of a large number of Pakistani diaspora since the advent of the 21st century boost gave rise to luxury housing. These were largely affluent families that were used to certain luxuries available in the developed nation. Upon their return, they wanted to have similar facilities.
Golf courses are one extreme offshoot of that very expectation which is valued by all top-notch Pakistani developers.
These market forces meant that some developers, including the likes of Bahria Town and Defence Housing Authority (DHA), became prominent as they catered to a particular demographic. They were successful in this and it forced other developers to follow the same path, giving rise to the idea of luxury housing.
The digital connection
The biggest hurdle faced by overseas Pakistanis looking to buy property locally was distance and additional costs. Additionally, the real estate sector in Pakistan has traditionally been quite confusing. However, their familiarity with the digital world meant that overseas Pakistanis were perfectly positioned to utilise the advantage it gave to the property market.
The owners of Zameen.com, Zeeshan Ali Khan and Imran Ali Khan, had some experience of working in the UK. The Khan brothers managed to launch what later on become one of the largest real estate websites in Pakistan.
Seeing Zameen.com’s popularity, both within and outside the country, over the years, other similar portals have also appeared on the scene.
Embracing the internet
Eventually, as the internet became more accessible, Zameen.com and other local websites gained traction. New websites also joined the fray. Going online now is the first step when looking to buy or rent a property.
The digital evolution has made it possible for the public to be able to assess the real state of the market online. Zameen.com, in particular, has developed several tools and placed them on its site for public use.
All of these added factors did three things for the housing sector in the country:
The affordability problem
Pakistan has a housing shortage running in the millions (11 million, according to some estimates) and it is increasing each year. The market, in its infinite wisdom, has not catered to this shortage. Perhaps it didn’t want to as the money lies in luxury housing. People buy plots for investment purposes and the market raises its prices (based on speculation alone).
The current PTI led government was elected on the promise of political and economic reforms. One of the grandest – some say too good to be true – manifesto promise’s was the provision of five million affordable homes.
Fortunately, it is one promise that the government seems to have taken up as its primary goals for this term. The past year has seen significant progress in this regard. Some say it may not be enough. However, if the government can construct 1 million homes in its five-year tenure then that would certainly be an achievement.
If they succeed, the government is going to transform the country’s housing market. They might even see a change in the entire real estate market. The possibilities of a public private partnership are attractive for developers, which can also result in a shift of focus from luxury to affordable. Or, if nothing else, a good balance of both.