Impact of Global Real Estate Sector on the Pakistani Market

As the use of the internet increased, the proverb that the world is a global village started getting muscle. As every person in the village has all ears to the life, affairs and routines of the other, similarly, through information technology, all individuals in this world are connected to one another. The Covid-19, which erupted in the Chinese city of Wuhan, spread worldwide in a matter of days because the world is truly a global village.

One of the reasons for inflation these days is that the Pakistani economy is heavily dependent on imports, and therefore global price rise has an impact on us. At the start, we have already mentioned how all the countries of the world are caught up in an invisible series where a change in one produces a domino effect on the others. Today's blog is about the impacts of the ups and downs of the global real estate sector on the Pakistani market. Rex Global Commercial Property Monitor says global real estate boom and bust trends impact real estate in all countries to some extent.

Some Shocking Real Estate Facts

The global importance of real estate can be calculated from the fact that in 2020, the global real estate market volume was $326.6 trillion. Shockingly, the Asia-Pacific region controls 40% of the global real estate market, while Western Europe owns 24% only. China's population is 1.4 billion, and it holds 30% of the global residential market.

The United States ranks second with 11%. Thus, China, the U.S., Japan, Germany, the UK, France, South Korea, Canada, Italy and Australia control about 75% of the global residential real estate. Among all, Africa possesses the lowest market value in global real estate.

Relation of Per Capita Income to the Real Estate Sector

Purchasing power is an essential aspect of real estate, which directly links with per capita income, i.e., G.D.P. Wherever per capita income is higher, people are happier, and we will see its impacts on the real estate sector.

The World Bank's reports say that the real estate sector holds 70-80% of the economic value of any country. Different countries are facing a shortage of low-cost housing units due to massive population growth. However, the real estate sector can not only meet the housing shortfall in different countries but also create employment opportunities.

Global Real Estate Trends and Pakistan

The Corona epidemic affected all walks of life. We saw that various countries, including Pakistan, countered the economic effects of the Coronavirus by opening up the construction sector after the lockdown. Worldwide, we have experienced a rise in the value of residential flats and small units in the real estate sector during Covid-19; the same pattern has been observed in Pakistan.

In the same way, due to the global work-from-home model, there has been a sharp difference in the prices of commercial properties. The same effect has been experienced in Pakistan. People now have a special place in their homes to deal with office matters. The U.A.E realizing the situation, launched a ten-year Residency Visa Program and relaxed the rules to promote real estate investment.

Pakistan's real estate sector has also withstood significant changes in the last three years. These include one-window operations, tax concessions, mortgage financing, extensive plans for low-cost housing units, cadastral mapping, revamping of master plans, reclaimed land from the occupation mafia, and modernization of laws. It is part of the global pattern where we see countries realizing the true potential of their real estate.

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