You are currently viewing Major Problems in Pakistan’s Real Estate Market

Major Problems in Pakistan’s Real Estate Market

Here we will discuss some of the major problems in Pakistan’s real estate market. The real estate sector plays an important role in the economy of a country. It boosts the income of people, stabilizes the cash flow, revolves wealth, lessens the impacts of inflation, generates governments’ revenues, grows numerous other sectors, and most importantly provides the required infrastructure for development. 

Pakistan’s Real Estate Market

Pakistan’s real estate sector is growing rapidly. After the agricultural sector, it employs most people. 60 to 70% of the wealth of the country is linked to the property sector which makes USD 300 to USD 400 billion according to the World Bank. 

Based on the above-mentioned facts, we can conclude that this is the most crucial sector of the economy. But the real potential is yet to be explored. Although recently, governments have given considerable attention to this sector,  Several loopholes are still needed to be overhauled to develop this sector efficiently. For example, approximately there is a shortage of 10 million houses in the country and with rapid population growth, the issue is getting worse.

In this blog, we will comprehend some major issues we are facing in the property sector.

Hindrances In Pakistan Real Estate

  • Institutional negligence
  • Malpractices
  • Insufficient planning
  • Lack of regulation
  • Interest rates

Institutional Negligence

Mostly our governments’ priorities have been irrational. The housing sector did not receive due attention from the authorities and the existing institutions have largely been unable to regulate this sector properly. This wreaked havoc and caused the development of illegal housing societies. It has manifold consequences. Firstly, it damages the environment and secondly, many local and international investors do not prefer to invest to avoid any ensuing trouble.


Fraudulent activities are not uncommon in this sector. People deceive investors, especially foreign investors in one way or another such as by selling non-existent properties. Often, these elements remain untraced or not taken into custody. These malign activities diminish investors’ interest. 

Insufficient Planning

Lack of planning is a considerable issue. Cities are expanding without any planning and as a result, the populace is unable to get facilities. The private sector, though considering this issue and paying due consideration to this aspect. Such as the developers of Hash Mall and Hash Residency primarily focus on planning to facilitate investors and residents of their respective projects.

Lack of Regulation

Regulation of this sector is pivotal. But lack of regulation slows down development and causes problems for investors. Many projects could not attain LOP and NOC at the time despite they adhere to all requirements.

Interest Rates

The economic condition of the country is obvious. The current Account Deficit and devaluation of the rupee led to an increase in interest rates. So, people who intend to invest in real estate by taking out a loan, step back from their investment decision. Because higher interest rates demotivate people who aspire to borrow loans. 

Also, read.


The real estate sector has a significant role in the country. It has the potential to revive the economy and uplift the country. But there are a few factors that are creating hurdles and demotivating investors such as lack of regulation, high-interest rates, insufficient planning, etc.

What is the future of the real estate market in Pakistan?

Recent growth and the increasing role of the private sector indicate a bright future for this sector. If the government pays due attention and investors are facilitated then, this sector alone has the potential to change the destiny of the country.

What are the real housing problems in Pakistan?

Formal housing is out of reach for many people. Cities are overcrowded and people are deprived of basic facilities. Lack of planning and uncontrolled extensions of cities are aggravating the situation.