Although the Government of Pakistan (GOP) has officially called an end to the pandemic, its impact is still being felt. The key economic sectors are still facing pandemic-related challenges. For example, the supply chains have been disrupted due to which manufacturing industries face delays in completing orders. One might think that the real estate industry fared better, but it is not the case. Let us look at how the pandemic has impacted Pakistan’s real estate industry.
Covid-19 and Pakistan’s Real Estate Sector
The impact was wide-ranging:
1. Slowdown in Rentals
One of the things noted is the decline in people renting commercial properties. As businesses came to a standstill, people were not earning money from their business. Due to it, they had no reason to rent a commercial property.
2. Calls for Rent Reductions
Another thing witnessed in Pakistan and globally called for a rent reduction. People repeatedly called for property owners to reduce the rents because they did not have the means to pay the rent. The reason is that many people lost their jobs due to the pandemic. In fact, many governments worldwide introduced moratoriums on evictions.
3. No New Projects
The construction industry also came to a standstill. Due to this, no new properties were being developed. Thus, people who invested their money in the real estate market had their investments stuck for a while now. Fortunately, GOP gave an unprecedented package to the construction sector to spurn growth. This gave a much-needed boost to the real estate industry.
4. Loss of Income
Many people earn their livelihoods from rentals. But as businesses were forced to close due to the pandemic, many opted to terminate the rental agreement. It meant that property owners saw a decline in their rental income.
5. Risk of Default
Property development or purchase is not a small task. It requires considerable capital. Many developers and individuals take out bank loans to finance their investments. The pandemic increased the risk of default because no work was being done on the project. Thus, they could not realize any return on investment. Fortunately, the GOP allowed the loanees to extend their payments without additional interest or other liability.
6. Associated Businesses
There are numerous businesses associated with the real-estate sector. For example, brokers, property agents, marketing agencies, and others. When the GOP restricted commercial activities throughout the country, associated businesses saw a decline in their income. Many were forced to close permanently, while others had to lay off employees to keep afloat.
Conclusion
While the pandemic has wreaked havoc globally, we must be grateful that Pakistan has certainly fared better than others. Our economy and people did not suffer as much as others. Lastly, we would like to say that if you plan to invest in the real estate market now that the pandemic is behind us, please contact us. Our team will help you find the best opportunity to get the maximum return on investment. Do not worry about losing your money as we only deal in projects approved by the relevant authorities. Thank You.
