Real Estate Business in Pakistan and Its Economic Implications
In recent years, the real estate industry in Pakistan has been one of the most appealing. This industry is run by many of Pakistan’s top twenty businessmen, including the Hashwani Group, Pakistan’s second richest corporate group. Mr. Abdul Aleem Khan is a legendary real estate businessman who has had a lot of influence on national politics.
The real estate company offers a low investment risk and a large profit margin at the same time, which is why it has drawn a lot of money. Many retired top military and civil bureaucrats have chosen this business as their final career because of the high returns. Real estate has become a huge draw for overseas workers due to its high rate of return and lack of entrepreneurial opportunities.
The real estate industry has some unique characteristics that are not found in other industries. These characteristics have significant ramifications for a variety of social and economic indices. Welfare. For example, the real estate industry necessitates large investments with a high return on investment. These investments are also more expensive than regular ones. This signifies rapid expansion. Individuals with a higher level of income will see an increase in their earnings.
THE ECONOMICS OF REAL ESTATE
During the last century, real estate economics has grown as a distinct field of study. There are a number of periodicals dedicated to real estate economics study, as well as a number of books on the subject. The only goal of this field of knowledge, on the other hand, is to counsel investors on business-related matters. The following is the Wikipedia definition of real estate economics:
The application of economic techniques to real estate markets is known as real estate economics. It aims to characterize, explain, and anticipate pricing, supply, and demand patterns. Housing economics, which is closely connected, has a limited scope, focusing on residential real estate markets, while real estate trends study focuses on the industry’s business and structural developments. Both use partial equilibrium analysis (supply and demand), as well as urban and spatial economics, substantial research, surveys, and finance.
SIZE OF REAL ESTATE BUSINESS AND ITS IMPORTANCE
According to the World Bank, real assets account for between half and two-thirds of a country’s total wealth. There is no way to estimate the size of real estate in Pakistan. We’ll use one example to illustrate our point: if you look for the top twenty richest persons in Pakistan on the internet, you’ll discover Mr. Abdul Aleem Khan, the owner of one of Pakistan’s most well-known land developers, Bahria Town, at number 112, with a net worth of almost 800 million dollars. Mr. Aleem Khan, on the other hand, has pledged to donate $2 billion to flood victims in 2010, claiming that he will donate 75 percent of his assets3. This implies that Mr. Abdul Aleem’s true fortune is more than his stated wealth.
SOME SALIENT OF THE REAL ESTATE BUSINESS
Real estate is a high-capital-intensive industry. It necessitates a significant amount of capital investment and relatively little work, particularly when it comes to the sale and acquisition of property. Land investment, even in the millions, does not result in long-term employment and save for the seller, buyer, and the person handling the transaction grants only one-shot opportunities deal. If ten million rupees are invested in agriculture, jobs can be created for tens of thousands of people involved in farm marketing and management the same amount, though, if nobody will be employed permanently if money is spent on land acquisition.
The real estate business is risk-free in the sense that it is not at risk of being robbed or defrauded. There is no risk of loss due to product spoilage because the property is not subject to depreciation. The cost of conserving the product is nothing. The above-mentioned amount of land ensures a steady rise in house values. These assets ensure that the real estate business will yield a positive and high rate of return. The high rate of return decreases capital flow to agricultural and industrial investments, which can generate a lot of jobs.
ATTRACTS THE PEOPLE WHO DO NOT WANT TO WORK AS AN ENTERPRISE
The sole condition for those participating in the business is to purchase a piece of land and then wait for prices to rise. For the real estate industry, minimal work and entrepreneurial panic are required. As a result, this firm attracts those who wish to put their money into a profitable business but don’t have the time to personally monitor it. As a result, real estate is particularly appealing to international workers. As a result, a significant amount of remittances is invested in this industry.
EXTREMELY HIGH-PROFIT MARGIN
Real estate is most likely the business with the largest profit margin among those where investors do not want to engage as business owners. Within a few years, a million-dollar plot may be worth ten million dollars. Real estate’s high and predictable earnings lessen the allure of other enterprises. Park View City Lahore provides golden opportunities for people to earn maximum profit and returns. Also provides a luxury lifestyle with 10 Marla House for Sale in Park View Multan Road Lahore. If you can buy your dreams then you reach on the right page.
LIQUIDITY IS LOWER
Real estate is the item that takes the longest to sell or buy. Once a plot is purchased, it will sit inactive for years in the hopes that greater prices will slow down the circulation of money. Lower money velocity means less economic activity and a slower rate of growth.
THE BENEFITS OF REAL ESTATE
Aside from the negative effects of the real estate sector, there are a number of benefits to owning real estate. Some of these are described in the following paragraphs:
ACCESS TO LIFE’S NECESSITIES
Residential facilities built by real estate developers are usually well-planned, and basic life amenities are provided. Schools, hospitals, transit, security parks, and market amenities are frequently offered in the housing developments.
Furthermore, real estate developer-developed municipalities are less congested. Many of these amenities are missing in unplanned traditional towns and colonies.
The construction aspect of the real estate business generates jobs not only in construction but also in a variety of other related industries. Steel, cement, pottery, furniture, communication, and a variety of other businesses benefit from the building industry.