Effect of Corona Virus On Real Estate Sector of Pakistan
More than 30 countries register confirmed cases and the number of affected cases around the world exceeds 80,000. Pakistan has recently become one of the countries to witness many cases. Various new policies and taxes have been implemented that have altered the shape of the real estate industry entirely. Over the last 2 years, large numbers of retailers, advertisers, builders, and buyers have barely managed to survive the crisis. They mostly thrive because of the huge investments made by our Pakistanis from overseas. But the problem is even bigger this time. As for now, the action of our buyers and sellers is a little disturbed by the Corona Virus.
Corona virus is a genus of viruses that can induce symptoms such as common cold, extreme acute respiratory syndrome (SARS), and in the Middle East Respiratory Syndrome (MERS). In 2019, the cause of a disease outbreak that originated in China was established as a new coronavirus. This virus is also referred to as Coronavirus 2 Extreme Acute Respiratory Syndrome (SARS-CoV-2). The infection it causes is called the 2019 coronavirus outbreak (COVID-19).
CORONA VIRUS SYMPTOMS
Signs and symptoms of COVID-19 will occur 2 to 14 days after exposure, including the following:
- Runny nose
- Shortness of breath or difficulty breathing
- Sore throat
People who are elderly or who have certain health illnesses, such as heart or lung disease or diabetes, may be at increased risk of serious illness. This is close to what is observed, such as pneumonia, in other respiratory disorders.
EFFECTS OF CORONA VIRUS ON REAL ESTATE SECTOR
Pakistan’s real estate market has already been remedied by government policies introduced in 2018, and now this outbreak is sure to be another setback for this industry in all major cities, including Rawalpindi, Islamabad, Peshawar, Lahore, Karachi & Multan. Due to the full lockdown in Pakistan, many businesses were forced to face detrimental consequences, including real estate. With the gradual propagation of this epidemic all over the world, the world’s economy has already come under scrutiny and our country faces the same difficulties. Let’s discuss the current situation and the repercussions of this dilemma, particularly for Pakistan’s real estate industry. The coronavirus epidemic has caused many businesses across Asia, including Pakistan, to introduce multiple types of remote work plans, influencing the speed and nature of companies. The growth in internet activity and data access has risen dramatically as more people stay and work from home. As for the real estate industry in Pakistan, by accentuating the tidal shift induced by technical advancements and modern lifestyles that are altering the demand and usage of real estate, the Covid-19 outbreak has triggered some indirect implications in the real estate sector. The real estate market faced a serious downturn as their work has come to a stop due to a lack of production of raw materials and goods, workers & laborers from the mechanical and construction fields have become restricted. But the reality remains that remaining alive and battling this lethal epidemic is more important in the current situation.
FUTURE OF REAL ESTATE IN PAKISTAN
The coronavirus pandemic has the potential to have a huge impact on property markets around the world. With massive unemployment, wage cuts, business failures, and job uncertainty, many people are likely to be cautious about buying a home. Not only in Pakistan but all over the world, the next few months are highly awaited for the real estate industry as the activity will continue to grow after this outbreak. The analysts predict that because of little business activity, property values would plunge 10-20 percent. It is recommended not to sell your assets in this setting because you are more likely to suffer a loss, on the contrary, since the investment would be at its lowest, it is a perfect time for buyers. As overseas investment is limited to an unforeseen duration, the global travel ban would also have dire consequences on the real estate scenario. Pakistan’s largest cities i.e. as the bulk of investment in these regions relies on overseas Pakistanis, Karachi, Lahore, Islamabad, and Peshawar will suffer seriously. Because of this outbreak, not only the real estate sector but all other sectors, including financial institutions, building industry, import and export, manufacturing industry, hotels and tourism, medical and educational industries will all suffer a heavy loss. It is only fair to conclude that in order to face the coming situation, we need to be trained psychologically and economically. It is not up to our government to participate and do our bit for improvement and pre-improvement, but also to us the people of Pakistan. It’s slower moving and the leasing fundamentals don’t swing wildly. The backbone of Pakistan real estate is the ex-pats who will take a substantial hit during this crisis.
The ranking of Pakistan in the Global Real Estate Transparency Index 2020 was 73 (out of 99 countries). With one being the highest, Pakistan ranked 3.88 on a scale of one to five. Although the ranking has strengthened from its 75th place in 2018, it does not give confidence to international investors. The prime minister seems to have a dear hope of tapping for investment into the deep pockets of the Pakistani diaspora. Ex-pats sent back remittances of around $20bn-25bn each year to help the nation remain afloat. It was stated that nearly 50pc of this sum is spent on real estate. Foreign exchange reserves by the State Bank of Pakistan rose by 3.74% on a weekly basis.
Pakistan’s scope for Real Estate is amazing. Both Local and International Investors are showing their participation in the Real Estate Sector of Pakistan. Various residential and industrial projects are developing across the country, offering everyone golden opportunities for Investment. Such investments are legal and some offer Investor-friendly payment plans as well. There is little impact of the Corona Pandemic on the behaviors of real estate buyers and sellers. Temporary travel ban by certain countries has caused some issues for Overseas buyers or sellers. Local investors are still engaged in their routine work, but they are also observing the evolving situation closely and cautiously. Everything we can do at this time is hope and wait for this scenario to pass and see where we are. The real concern is not whether or not this outbreak will strike the real estate market because we are still facing a massive blow in the industry.