Summary
This report argues that the real estate market and allied construction industries have a pivotal role in economic development and jobs creation. Together, they constituted 9.2 percent of GDP, and created 3.85 million jobs in 2014-15. However, the potential role of the real estate sector has been constrained by informal markets, lack of formal capital, and fiscal disincentives. In order to encourage formal market to invest in the real estate, the Securities & Exchange Commission of Pakistan issued Real Estate Investment Trust (REIT) regulations in 2008, which were revised in 2015. However, these regulations have not helped in sectoral development. In last seven years, only one REIT scheme has been launched.
The report suggests some policy, regulatory and fiscal measures to facilitate a more effective role of the real estate sector in economic development, employment generation and industrial growth by bringing it in the formal market. Given an estimated 10 million families not having their own housing and using a base figure of two million rupees as an average cost of a residence, the economic activity to cover this shortfall alone could amount to Rs. 20 trillion.
