The real estate sector in Pakistan needs robust regulatory bodies to ensure sustainable development and foster transparency, accountability, stability and protection of the interests of all the stakeholders. Talking to WealthPK, Babar Bhatti, Vice President of the Islamabad Estate Agents Association, emphasized the pivotal role of the construction and real estate sectors in addressing the economic challenges facing the country. According to Bhatti, the solution to the economic problems lies in the development of these sectors, as they not only bolster the allied industries but also serve as significant generators of employment opportunities. "Construction projects, by their nature, require a diverse workforce, including architects, engineers, laborers, and administrative staff. Simultaneously, the growth in the real estate market leads to an increased demand for real estate agents, property managers, and other related professions," he maintained. He pointed out, "The real estate sector is grappling with a series of pressing issues that demand urgent attention and resolution. The key challenges are to boost the investor confidence and ensure the security of investments." "Real estate transactions involve substantial financial commitments, and investors need assurance that their investments are safe from fraud and legal uncertainty," he added. "Establishing robust legal frameworks, enhancing property rights protection, and implementing effective dispute resolution mechanisms are essential steps."

"Moreover, promoting transparency in property transactions through measures such as digital record-keeping and authentication can contribute to building trust among the investors," he stressed. According to the State Bank of Pakistan, the real estate sector contributes around 2% of the country's GDP with an estimated value of Rs5.2 trillion ($32. billion). It is one of the largest and fastest-growing sectors of the economy. Rizwan Alam from Sky Marketing, Islamabad, shed light on the existing loopholes in the real estate sector. He particularly highlighted the lack of regulation despite some official attempts to bring this sector under the tax net. According to him, the sector is grappling with widespread malpractices that can only be curbed through the implementation of an effective mechanism to regulate and tax the industry. "The unregulated nature of the real estate sector leaves room for various malpractices, including tax evasion, fraudulent transactions, and non-compliance with the established standards," he stated. Rizwan's call for an effective mechanism to bring the sector under the tax net is rooted in the understanding that formalizing and regulating real estate transactions can serve as a deterrent to such malpractices. He underscored, "By bringing the real estate sector under the tax net, the government can establish clear rules and standards, thereby fostering a more transparent and accountable environment."

Credit: Independent News Pakistan (INP)