Owning land or property in Pakistan is more than just a financial decision, it is a symbol of social status and long-term security. Over the years, the real estate sector has grown rapidly, offering attractive returns to investors, especially in major cities like Lahore, Karachi, and Islamabad. However, behind the growing number of housing societies and rising property prices, there are serious challenges. These include poor regulation, speculative buying, and weak urban planning. This editorial examines the opportunities that exist in the real estate market, the issues that slow its progress, and the steps that can help improve it.
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Real Estate’s Role in Economy
To understand the situation clearly, one must first consider how important real estate is to Pakistan’s economy. The sector contributes more than 2% to the country’s GDP directly and supports more than 50 related industries, including cement, steel, wood, and construction materials. With a population of over 240 million and a growing rate of urbanization, demand for housing and commercial spaces continues to rise. Every year, around 700,000 new housing units are needed, but the supply falls far short. This gap creates both a crisis and an opportunity for investors and policymakers.
Challenges of Poor Regulation
Despite this growing demand, real estate in Pakistan lacks clear rules and strong management. Many people invest in property, not to build homes or businesses, but simply to sell it later at higher prices. This focus on profit instead of development often leads to poor planning, unapproved housing schemes, and rising costs that make homes unaffordable for average citizens. As we move forward, it is essential to explore the strengths and weaknesses of this sector and understand how it can be made more stable and inclusive.
Investment Opportunities Are Strong but Uneven
One of the main reasons people continue to invest in real estate is the promise of high returns. In cities like Lahore and Islamabad, areas such as DHA, Bahria Town, and Blue Area have seen property values double in the past five to seven years. This is especially true for housing societies located along major roads or near future development zones. These projects often attract investors not only from within Pakistan but also from overseas Pakistanis looking to secure their savings. In many cases, the promise of security, a better lifestyle, and quick profits is too tempting to resist.
At the same time, this rise in property value is not always linked to real development. Instead, prices often increase simply because more people want to invest, not because of better services or infrastructure. This situation shows that while real estate offers real chances to earn, these benefits are not equally available to everyone. Many people, especially those with lower incomes, are left behind.
Weak Regulations Open the Door to Fraud and Confusion
Although the market is growing, it is still largely unregulated. There is no central authority in Pakistan that oversees the real estate sector nationwide. Instead, different cities and provinces rely on their own development authorities, such as the Lahore Development Authority (LDA) or the Capital Development Authority (CDA). Unfortunately, these institutions often do not work together, and their systems are outdated. As a result, many housing schemes operate without proper approval, and buyers are often unaware of the risks involved.
For example, according to Transparency International Pakistan, thousands of housing societies in Punjab and Sindh are unregistered or illegal. This means that people who buy land or homes in these areas may lose their money or face long legal battles. Without a proper system to check and control such projects, developers continue to take advantage of the system. This lack of trust in the system also scares away serious investors who want clear laws and accountability.
Speculation and Hidden Wealth Drive Prices Up
Another major problem is the way people treat property as a quick way to make money, rather than as a space to live or build. This type of thinking creates what economists call a “speculative bubble,” where prices rise quickly but without real improvements in infrastructure or services. In places like Islamabad’s E-11 sector or Lahore’s outskirts, land prices have doubled in recent years even though roads, drainage, and schools are missing or poor.
This is possible because much of the real estate market is still undocumented. Until recently, people could register a property at much lower values than its actual worth, allowing them to avoid taxes. The government has tried to fix this by increasing valuation rates and passing the Benami Transactions Act. However, because of weak enforcement, many people still find ways around the law. This shadow economy makes it harder for regular people to afford homes and creates a market that only benefits the wealthy.
Overseas Pakistanis Face Risks Despite Contributing Billions
Pakistan’s real estate sector also depends heavily on investment from overseas Pakistanis. Every year, they send billions of dollars back home, and a large portion of that money goes into property. Real estate expos in Dubai, London, and Toronto specifically target these investors with promises of high returns and premium locations. In many cases, they invest in so-called “Overseas blocks” of housing societies that claim to offer extra facilities, often built upon widely circulated real estate myths in Pakistan and the corresponding truth of the legal landscape.
However, despite their trust and investment, many overseas Pakistanis end up losing money. For example, a major housing scam in Rawalpindi in 2021 affected hundreds of families living abroad. These buyers had no legal support, and many are still waiting for refunds or possession. The lack of proper legal protection and poor dispute resolution in Pakistan has made some members of the diaspora reluctant to invest again. If Pakistan wants to maintain this important source of funding, it must create stronger laws and make legal processes quicker and fairer.
New Trends Are Helping Modernize the Market
Even though the sector has many problems, some recent changes are moving it in the right direction. For instance, real estate platforms like Zameen.com and Graana have made it easier for people to find, compare, and verify properties online. These websites also offer market insights and legal advice, which help reduce fraud and confusion. At the same time, the Securities and Exchange Commission of Pakistan (SECP) has started promoting Real Estate Investment Trusts (REITs), which allow people to invest in property without having to buy land themselves.
Another positive trend is the growth of vertical housing, especially in cities like Karachi and Lahore, where land is limited. High-rise buildings can house more people and reduce pressure on roads and utilities. However, this shift must be managed carefully, with proper rules to ensure safety, access to water, and fire protection. If planned well, these trends can make the real estate market fairer, organized, and future-ready.
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In light of the arguments discussed, it becomes clear that Pakistan’s real estate sector is full of contradictions. On the one hand, it offers strong investment potential and new growth areas. On the other hand, it is held back by poor governance, speculation, and legal loopholes. The lack of transparency and coordination among different authorities weakens public trust. Moreover, overseas Pakistanis, despite contributing huge sums, often face serious risks. Unless the government introduces strong regulation, improves tax systems, and supports new technologies, the sector will remain unfair and unstable. Real change will only come with strong political will and institutional reform.
To sum up, Pakistan’s real estate sector is full of promise but held back by deep-rooted challenges. It attracts billions in investment and supports economic growth, yet it suffers from weak regulations, rising speculation, and a lack of fairness for common people. If the government can introduce better laws, protect buyers, and use new technologies wisely, real estate can become a tool for development, not just profit. It is time to move from land grabbing to land planning, because a fair housing system is not just about buildings, but about building a better future for everyone.
