LAHORE:Pakistan real-estate sector is equipped enough to drive the country’s economy forward as it has the highest per capita demand for housing in the world.
On the demand side, the real-estate sector is the preferred investment avenue for most Pakistanis and is currently worth over $3 trillion.
Additionally, according to a World Bank report, an increase in foreign investments and remittances directly correlates with the worth of the real-estate in a country.
Furthermore, the real-estate sector drives growth in several industries in Pakistan such as cement, timber, sanitary fittings, glass manufacturing, steel, furniture and electronics. The end product of this sector facilitates economic activity in the country, pushing its horizons across all sectors.
Currently, Pakistan is facing an acute housing shortage but the actual required number of homes remains controversial. Some figures, quoted by the World Bank, suggest that Pakistan is facing a deficit of 10 million housing units, while the Pakistan Credit Rating Agency (PACRA) puts the number at around 35.3 million units, based on the current and projected population in its report released in May this year.
According to PACRA, a substantial contribution to the country’s economy comes from the real-estate sector, accounting for around 5.4% of the gross domestic product (GDP) in the fiscal year 2020-21.
However, in Pakistan, the industry is in a development phase and many companies are striving to introduce new ways of operating in the real-estate sector. The induction of technology is one of the areas which can help mitigate the influx of fraudulent activities observed in the sale and purchase of land.
“In Pakistan, traditionally, the real-estate sector drives business activity in over 70 other industries, thus proving that smooth functioning of the sector is essential to economic growth and prosperity,” remarked Jawad Nayyar, DAO PropTech Co-founder and Chief Vision Officer.
In an interview with the Express Tribune, Nayyar explained that “An impact on this sector will result in massive losses to the numerous other industries that feed off of it. This is why the real-estate sector is often granted subsidies and special amnesty schemes by governments.”
“Real-estate is the go-to investment option for the world and it is no different in Pakistan. This is because it is a tangible asset that has intrinsic value due to its limited supply and ever-increasing demand. Growth through innovation in real-estate is the primary need of the hour,” he added.
While talking about DAO PropTech, Nayyar said, “The company has corporate and professional experiences in real-estate, data analytics and technology. Having served in various industries, in and outside of Pakistan, the management is now focused on leading one of the most sought-after asset classes, real-estate through a technology driven economic transformation.”
Nayyar underlined that it was the company’s priority to shift to the Web 3.0 space, which will provide further impetus to the sector.
“We are kick-starting disruption of the Pakistani real-estate industry’s value chain through extensive use of data, technology and a fair and inclusive valuation methodology. We are hopeful that inclusive, transparent and asset-backed growth will also propel the country towards positive economic growth,” he said.
“The real-estate business in Pakistan is worth over $3.5 trillion. By its very nature, investment in real-estate comes with a certain level of risk. There is a probability of loss, the probability of the investor not receiving the expected or required rate of return,” explained Nayyar.
“The risks involved in real-estate investments in Pakistan are largely unknown to the average investor. They are kept hidden from the first-time buyer because they favour the already established players in the market, the marketing companies and the middlemen,” he added.
“DAO PropTech envisions eradicating the existing, inherent problems stemming from opaque practices and information asymmetry from Pakistan’s real-estate sector,” emphasised Nayyar.