* Real estate sector in Pakistan has come to a point of stagnation
* How did this recession develop?
* First we discuss how real estate developed into an industry in Pakistan
* Before 9/11, if a family planned to build a house,
* they would be able to do so within 8-10 years of hard work
* That’s because the forces who took the prices
* to an unnatural level, hadn’t come into play as yet
* Then 9/11 happened and there was massive inflow of dollars
* Historically, every time there was influx of dollars into Pakistan,
* our real estate sector took a new turn
* But after 9/11 especially, there was an extraordinary change
* Dollar inflow increased, banks’ liquidity increased,
* new consumer markets’ models were introduced,
* the economy turned consumption-based
* expatriate Pakistanis started investing in the country,
* then corporate world jumped in and turned it into a commodity
* Industrialists pulled their money out of other industries
* and started developing housing societies
* because the return was quick,
* and convinced investors to invest into this industry
* Within years, property prices went out of common man’s reach
* This 15-year cycle took real estate prices to unnatural heights
* The genuine components of this entire activity started getting removed
* Some people think that taxes imposed on transactions are
* the cause of recession in real estate sector
* But the point to which property prices have risen,
* even if govt revokes the taxes,
* business in the sector might not get restored
* though there can be exceptions of course
* Currently, it seems the recession in real estate will continue
* for another ten years
* and property prices will not only remain stable
* but might also see a drop of 5-10%