Real-estate bubble

Pakistan’s real-estate sector has seen an exorbitant rise in property prices over the last two years, with many attributing this surge to the excessive placement of black money in the industry. With the government enforcing stricter diligence and reporting requirements for investments in bearer instruments, black money now sees the unproductive real-estate sector as a stress-free choice. This trend has caused a significant distortion in the market prices and created a real-estate bubble, with genuine buyers unable to afford property anymore. Unfortunately, this situation has robbed the government of tax revenue. The value of houses and plots is often underreported, and the rest of the payment is settled under the table, making it difficult for the government to collect the taxes due.

It is essential for the government to introduce stringent measures and properly enforce reporting requirements so that property prices can be stabilized, and ordinary people can afford a house of their own. This emphasizes the importance of ensuring that investments go towards sectors that produce real goods and generate employment, bridging the supply-demand gap and stabilizing prices in the market. Only then can consumers expect to receive competitively priced goods at the best possible market prices.

Jamil Soomro

Karachi