Developers should focus on local Pakistani market
Approximately 9 million Pakistanis live abroad. Majority of Pakistanis live in Saudi Arabia, UAE, UK, USA, Canada and Australia. These Pakistanis send huge remittances. Pakistan received record $20 billion remittances from Pakistani expatriates in 2015. Major portion of this money is parked in the real estate sector of Pakistan, as Pakistani expatriates want a home in Pakistan too.
In Pakistan real estate developers build housing schemes by keeping in mind the requirements and purchasing power of foreign Pakistanis. This is why that new projects in Pakistan have state of the art planning but at the same time are expensive. In 2015, many new commercial and residential projects emerged in top Pakistani cities. But majority of the projects were expensive even for foreign Pakistanis. The projects that were affordable were sold out like hot cakes. Due to many unsold projects in 2015, developers should change their strategy by building affordable projects due to the following two major reasons;
Foreign Pakistanis are losing buying power
World is upside down. Due to record low oil prices, oil producing nations are feeling the burn. Azerbaijan has just applied for loan from IMF. Saudi Arabian economy is way down. UAE is bleeding and property prices in Dubai have decreased by 14% in 2015. Dollar and Pound Sterling are in danger of losing value due to coming China Gold Fix in April 2016. Many experts are predicting that civil war in USA is coming. Canadian Dollar is in free fall. Australian mining industry is down due to low demand of raw materials from China. Economic crisis is on rise in middle-eastern and western countries. Due to all these changes, Pakistanis expatriates are losing buying power. Therefore, this is the time to develop more affordable projects.
Affordable housing demand is increasing in Pakistan
Pakistan is facing severe shortage of housing. We just need 1 million houses to solve housing shortage in Pakistan. But we are just building 2 Lakh new houses every year. Due to this housing shortage, local housing demand is increasing. Local buyers just need affordable homes, as new projects are often out of their reach. Developers should focus on local market as it has great potential and profit margin due to huge number of properties required for booming population.
Time to construct affordable housing for local Pakistanis
As discussed earlier, 100’s of new projects are unsold in Pakistan due to unaffordable prices. This is the time for the developers to build affordable houses for both foreign & local Pakistanis. Best way is to build more housing for local Pakistanis and just 5% housing for Pakistanis living abroad. What we are building in Pakistan are ghost streets like Europe where houses are empty due to highly unaffordable prices. Karachi has better strategy for housing. Main target of Karachi developers is to provide housing for local Pakistanis with fewer projects for Pakistani expatriates. This is why property prices in Karachi are more affordable and projects always attract large pool of buyers. Rest of Pakistani developers should patronize the developers of Karachi.