The real estate sector is currently going through a rough patch, primarily due to the burgeoning construction cost. This issue has sent ripples across the industry, impacting developers, investors, and potential homeowners alike, reports WealthPK. Talking to WealthPK, President of Islamabad Estate Agents Association (IEAA) Sardar Tahir Mehmood said, "Owing to the current economic uncertainty, investments have become increasingly risky across all sectors. Over the past few months, the inflation rate has surged from 40 to 50 percent.

"In the past, people would invest their savings in real estate, but these days, everyday expenses leave individuals with little or no savings for investment. Consequently, there is a lack of demand for properties in the market. In the present circumstances, there are individuals willing to sell, but there are no longer any buyers interested in purchasing property files." "The rising prices of construction materials have multiplied the cost of construction projects. This has dented the confidence of customers," he pointed out.

The IEAA president said cartelization and monopolies in the supply system of construction materials were also discouraging competition and the customers had to pay whatever price the suppliers set. He urged the authorities concerned to keep a check on the prices of construction materials like other industries to break monopolies and cartelization. "However, despite encountering numerous obstacles and difficulties, the real estate sector has played a pivotal role in fuelling economic growth in the country over the past few years. It has made substantial contributions to job creation, enticing investments, and facilitating economic rejuvenation," he said.

Talking to WealthPK, Senior Research Economist at the Pakistan Institute of Development Economics (PIDE) Usman Qadir said, "The construction sector has a share of 2.5 percent in the GDP. The policymakers must be urged to adopt suitable fiscal policies that address these challenges in order to evolve and improve the construction sector. "An appropriate action should be taken to address the challenges and a better fiscal policy should be designed that can benefit the construction industry because it contributes significantly to the GDP and job creation at all levels," he emphasized.

"In order to combat these looming dangers, the government needs to ease up on the sectors and industries that can stabilize the economy," he maintained. According to the data from the All Pakistan Cement Manufacturers Association, the total cement despatched during September 2023 was 4.115 million tons against 4.284 million tons despatched during the same month of the last year. During the first quarter of the current fiscal year, total cement despatches (domestic and exports) were 11.873 million tons, up 23.40 percent from 9.621 million tons despatched during the corresponding period of the last fiscal year.

Credit: Independent News Pakistan (INP)