Plight of real estate sector

2026-01-26 - 23:24

IN the face of rising operational and regulatory hurdles, President Islamabad Chamber of Commerce and Industry (ICCI) Sardar Tahir Mahmood has done well by drawing the attention of Prime Minister Shehbaz Sharif to take urgent measures to address these challenges. In a letter, he has demanded of the Government to officially declare real estate as an industry, reduce multiple taxes, review the FBR’s excessive valuation of the residential and commercial properties and take notice of the discriminatory policies of the Capital Development Authority (CDA). The issues highlighted by the President of the ICCI are genuine and deserve priority consideration by the Government as the real estate sector has a strong multiplier effect, supporting nearly 100 to 150 allied industries, including cement, steel, construction materials, transport, financial services, architecture, engineering and skilled labour. His emphasis that global experience demonstrates how a well-regulated real estate sector acts as a backbone for economic growth in both developed and emerging economies is quite relevant. Pakistan faces a severe housing crisis as there is an estimated shortage of 12 million housing units due to population growth and urbanization and the demand is exceeding one million units annually. It is because of this that the successive governments announced with fanfare initiation of housing projects but almost all of them miserably failed to make a real impact. It is a foregone conclusion that the government cannot meet the shortage but it can definitely announce incentives to encourage the private sector to complement its efforts and strengthen the hands of citizens to have their own homes by reducing the cost of construction. Experts point out that the shortage is considered a major investment opportunity, particularly for developers and financial institutions focusing on affordable, sustainable housing solutions. However, it is regrettable that some of the measures of the government and its policies have pushed the cost of land as well as that of the construction material to unbearable limits, effectively denying low-income and middle-income segments of the society to realize the dream of owning a house. The demand for proper regulation of the sector also needs urgent attention as unregulated activity leads to frauds and loss of life-time savings of innocent people. It is a matter of concern that the federal and provincial governments as well as their agencies and departments concerned deliberately close their eyes to illegal and unregulated housing projects and schemes and come to action only when people make heavy investments on building of houses. A number of such housing schemes cropped up in the vicinity of the twin cities of Islamabad and Rawalpindi where millions of people reside. Now that such housing clusters have become a reality, the government should take steps to regularize them and ensure provision of proper civic amenities to them. However, strangely enough, the future of these housing settlements and their residents is put at stake by placing a ban on electricity and gas meters in such areas. The SNGPL was not installing meters in houses built in schemes not approved by the CDA and now IESCO too has been asked not to supply electricity to such houses. Going by the fact that the massive investment in these colonies and towns cannot be reversed, the ban is nothing but a pro-elite measure aimed at pushing prospective investors to housing projects launched by a few privileged housing societies. The Prime Minister may take notice of this unjust move, which will alienate hundreds of thousands of voters because they are being pushed to the wall. The PM may also listen to the suggestion of the President ICCI for organizing an annual National Real Estate Conference to institutionalize policy dialogue, enhance stakeholder coordination and promote consistent and informed decision-making.