Digitisation of Land Records in Pakistan

Introduction

The advent of digitisation can be attributed to the discovery of programming languages introduced in the 20th century. This new technology disrupted most of the existing patterns and pathways of the then industry and economy, driving a change towards a more digitised future (Europeanproperty, 2020). That will help people to check land records online. Since then, efforts towards digitisation have transformed many industries, including revolutionising the core values of the real estate industry through fast-paced technologies like Proptech, Contech and Fintech. Pakistan is no exception to the rapidly digitising world. With a booming real estate industry, real estate assets amass 60 to 70 per cent of the country’s total wealth. As of now, real estate is the second largest sector in Pakistan’s economy after agriculture, generating jobs through more than allied industries. Moreover, construction and asset management are essential aspects of the real estate sector. With land being the most valuable commodity in an economy, transactions constitute a significant part of the real estate sector. Even though progress has been made in digitisation, land records are not yet digitised on a macro level, leading to numerous malpractices in the real estate sector.

This article by the Iqbal Institute of Policy Studies will discuss digitisation in the context of the real estate sector of Pakistan, proptech, and the importance of digitisation of land records.

Digitisation in the Real Estate Sector

Pakistan has emerged as the 5th most populous country in the world (Worldometer, 2021). The country reached its highest ever recorded statistics for urbanisation, 37.17%, in 2020, urbanising at the rate of 3%, the fastest in South Asia (Statista, 2020). These demographic realities reflect the real estate sector’s potential in a developing country like Pakistan. More importantly, there is an influx of young, bright and educated minds in this sector. However, in real estate development, the lack of a digitised and consolidated database has contributed to numerous problems in terms of capital influx into the economy. Due to an unregulated real estate market and sham projects, the “capital trap” has become a significant issue in the real estate sector. Looking more closely, it is appalling to note that most of the horizontal and vertical real estate projects launched in Pakistan to date are unapproved by the regulatory authorities. (Complaint Cell, 2021). (Tribune, 2021). Therefore, digitisation of land records is of paramount importance to streamline real estate transactions and make the process transparent, which will, in turn, contribute to investor confidence and an increase in investment in the real estate sector in Pakistan.

Importance of Digitisation of Land Records

The digitisation of land records will ensure transparency and accountability in land management and real estate transactions. A digitised land record should ideally provide a potential investor with the certified digital copy of the Periodical Record of Land Rights (fard or jamabandi) and the Mapping Sheet (field map or mussavi) and the relevant details of the land ownership, co-sharers and stakeholders of the property. For a nationwide digital database of land records, the digitisation should begin from the local government level, covering the tehsils and districts, up to the federal level. The digitisation in the real estate sector has given rise to a new term, ‘proptech’, which refers to startups offering technologically innovative products or new business models for the real estate markets. In this regard, proptech companies can play their role in the excellent digitisation of land records in Pakistan. For example, Propsure Digital Solutions Ltd. is a one-of-a-kind proptech company that uses disruptive technologies to conduct spatial analysis of land to create visualisations of geospatial information of a particular property in a specific area in the form of a map.  Thus, providing an in-depth real estate market analysis that equips the clients to make informed decisions about a property, including but not limited to its price, dimensions, permitted land usage, by-laws, plot status, building height, and adjoining road etc.

In essence, through digitisation of land records, the government can amplify the market knowledge with the true impact of location-based data to better understand the real estate market and the factors that drive growth and avoid the capital trap.

Conclusion

Digitisation of land records is the need of the hour for the rapidly urbanising Pakistan. This will guarantee transparency and accountability in real estate transactions while building confidence in the real estate market.  The issue of the capital trap will be mitigated to a certain extent as the digitised land record will eliminate the operations of illegal and unapproved housing societies. It will also make the transfer of property easier by restructuring the processes through the digital database. Digitisation will also make the process of real estate transactions cost-effective for the consumer, eradicating the extra-legal territory of land brokers. In short, the digitised land records of Pakistan will decimate most of the issues related to real estate transactions. They will restore the confidence of consumers in the real estate market.