Top 10 Challenges in Real Estate Industry of Pakistan

Why Real Estate Investment is Trending in 2022?

People’s general desire to protect their future motivates them to invest in Pakistan’s real estate market. The real estate market in Pakistan makes a significant contribution to the country’s economic prosperity. The real estate industry contributes almost 60–70% to the country’s wealth, and it is Pakistan’s second-largest employment-generation sector after agriculture.     However, due to the previous government’s high taxation on the real estate industry, investment trends in real estate have reduced, resulting in the sector’s ultimate loss.   This industry has been hit hard by the recession; numerous real estate consulting offices have closed, and millions of individuals who work in it are now hungry.     While property development can be a lucrative sector of the real estate market, it is full of dangers and obstacles that can derail projects and earnings. Here are some of the most common issues in the real estate industry:

1. Permits & Approvals for Projects

Getting approval or NOC from proper authorities is one of the initial steps in development. Then there are permits, which are required for new construction, reconstruction, alteration, repair, relocation to a new location, and the removal of any structure.

Electrical, mechanical, and plumbing systems all require separate permits to install, extend, alter, or repair.

While obtaining the necessary approvals and permits can be a simple procedure, there is always the possibility that it will take much longer than expected time or that the approvals and permits will be denied.

Developers should begin the permit and approval process early and interact efficiently with the local municipality’s permit department to avoid any issues.

Smart buildings are outfitted with cutting-edge technology that allows for simpler tracking of energy consumption. These intelligent gadgets do not require human involvement and can function on their own. Human mistake, on the other hand, consumes no energy resources. As a result, smart buildings enable energy conservation and enhanced efficiency.

2. COVID-19

Only time will tell how the global pandemic will continue to affect our lives long after it has passed. One thing is certain COVID-19 has forced us to abandon our old habits in favor of new ones.

The affordability dilemma has worsened as interest rates have increased. Pakistan’s economy will contract further as a result of the existing economic situation. COVID has a detrimental impact on the real estate market.

3. Weakening Economy

As a result of COVID-19, the economy is expected to remain in recovery for several years and this will have a longer-term impact on the real estate business.

The real estate business is heavily influenced by the country’s economic situation. The real estate market will perform well in the global market if the country’s economic conditions are favorable. 

When economies do well, investors invest their money, and demand for real estate rises as a result. This occurs because real estate in Pakistan interacts with other businesses and marketplaces.

The real estate market, on the other hand, may collapse if the country’s economy is failing and declining over time. When investors learn that the economy is in trouble, they withdraw their funds, leaving the real estate market with financial losses.

4. Interest rates

 Interest rates are critical to the real estate market’s growth and development. People can borrow money from financial firms and banks. When interest rates rise, customers are less likely to take out loans, which reduces demand in the real estate market, particularly in the housing societies.

The government should take drastic measures to secure a low-interest rate in order to promote demand for real estate services and products. This will encourage investors and the general people to put money into real estate.

5. Management Issues

 The real estate business in Pakistan is disorganized since few individuals and companies are familiar with the ins and outs of the industry. Unfortunately, many people in Pakistan claim to be specialists in the field of real estate. They lack the necessary real estate knowledge, skills, and competencies.

 As a result, they strive to defraud individuals and cause them financial harm. Many scams have also been reported in the media, indicating that many unlawful businesses exist in Pakistan, contributing to real estate fraud.

6. Increased Market Competition

The real estate market has been extremely competitive in recent years, with numerous real estate developers and builders emerging and expressing a significant interest in the industry, resulting in increased operational and sales costs.

 As a result, they strive to defraud individuals and cause them financial harm. Many scams have also been reported in the media, indicating that many unlawful businesses exist in Pakistan, contributing to real estate fraud.

People are finding it difficult to discover a cheap company as operating and sales costs have drastically increased. 

Increased competition in the real estate market, on the other hand, has certain good consequences too, such as boosting the quality of construction and development. At the same time, it is unfavorable for purchasers and investors because the prices are inflated.

7. Lack of Funds

Real estate investors may require outside money to complete their projects. These funds are provided by financial entities at a rate of interest. In Pakistan, the funding procedure might take a long time, resulting in concerns such as deal loss, higher interest rates, and so on.

8. Constraints of technology

The real estate industry is transitioning from traditional to digital real estate all around the world. Many businesses are focusing on digital media including online portals, websites, and social media.

Pakistan is a country where technological advancements will take time and where most people are not tech-savvy. As a result, many are unaware of the benefits of the online real estate market. 
Pakistan needs to improve its technology literacy to keep up with the global economy and rising trends. The government should offer seminars and educational degrees for the general public to achieve this.

9. Land Mafias and Disputed Land

 The strength of land mafias is a key problem in the growth of the real estate sector; investors are reluctant to invest in such scenarios because they do not feel safe.

Another major issue in Pakistan’s real estate sector is the lack of legal documentation of land. There is often conflict over the ownership of the land, and it is not properly documented. As a result, investors avoid investing in such situations.

10. Scams

Real estate scams are possible in Pakistan. Many people and bogus companies try to defraud innocent people by selling them fictitious real estate projects. The digitizing of real estate records in Pakistan has begun, with all registered and legitimate real estate projects being recorded.

Make sure you conduct your study and check with your local development authority before investing in real estate projects to confirm the project’s authenticity.


So, these are some of the real estate issues that are now affecting Pakistani society. To address these issues, we must work together as a nation to assure transparency, security, and well-being of the community.
 In addition, the government should take drastic measures to eliminate all real estate loopholes and malpractices.

Make wise decisions with the best real estate agency. Al Sadat Marketing  offers the best real estate services in Pakistan

Al Sadat Marketing  is one of the leading companies that has been providing its marketing services in Pakistan’s Real Estate sector for more than a decade and has seen great growth while gaining widespread public trust. We operate professionally and believe in open and honest communication. Al Sadat Marketing  constantly provides its clients with the best deals and strives diligently to meet the demands of each investor. 

Please contact us or visit our office if you require additional information, have questions, or wish to sell or purchase residential or commercial plots. Call us at 0331 1110005 or visit



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