Preamble
Real estate is increasingly becoming an industry with a massive potential for growth and investment in Pakistan. With an emerging market, the demand for educated real estate agents is on the rise. This blog by the Iqbal Institute of Policy Studies (IIPS) highlights the importance of real estate education for overcoming the challenges faced by the realty sector. Real estate education is a global discipline and is gaining ground in Pakistan with a few institutes taking the lead in offering courses on real estate. The blog also presents measures to incorporate real estate as a discipline in Pakistan’s education system.
Research Questions
- What are the prospects of the real estate sector in Pakistan?
- What are the challenges faced by the realty sector due to lack of real estate education?
- What are the benefits of real estate education?
- How can real estate education transform the realty sector in Pakistan?
Introduction
The world has witnessed a revolution in the real estate sector. With the use of technology increasing in the real estate market for conducting and managing the business, demand for individuals with proper real estate knowledge and expertise is increasing day by day. Pakistan has an attractive real estate market with potential for growth and expansion. Not only is the sector promising from an investor standpoint, but it is also becoming lucrative for the aspiring youth of Pakistan as a career option. With PropTech startups expanding in Pakistan’s real estate space and regulatory measures being adopted by the government, education in real estate will significantly improve the role of agents, brokers, and consultants. A realty education can also reduce the chances of fraud in deals and also help better navigate a speculative market with decisions based on facts and data. Therefore, the importance of a proper real estate education cannot be overstated as the benefits far outweigh any perceived costs.
Real Estate Sector in Pakistan: Prospects and Challenges
Investing in real estate has become the first choice for many individuals in Pakistan. Real estate markets in Pakistan’s major cities like Lahore, Karachi, and Islamabad are the prime focus of investors resulting in the prices of properties touching millions of rupees. Not only has the sector become attractive from an investment point of view, but it has also become an excellent avenue to pursue a career due to the upward trend in the real estate market. According to Atiq (2020), Pakistan’s real estate sector is worth $300 to $400 billion. With smart companies like Graana.com and Agency21 bringing innovation and technology to the sector, it is enjoying a broader consumer and investor base.
Recent regulatory measures introduced in the real estate sector such as the Real Estate Regulation and Development Act 2019 are expected to enhance transparency and improve land dispute settlement processes. The State Bank of Pakistan also announced regulatory incentives to enable and promote housing finance and construction finance. These will eventually give a much-needed boost to the sector in the form of more significant housing finance and mortgage loans (The Express Tribune, 2020). Furthermore, the Naya Pakistan Housing Program (NPHP) offers a promising future for the provision of affordable housing to the middle and low-income groups. Lastly, due to the enactment of six new regulatory laws, Pakistan is now among the top ten business climate improvers (The World Bank, 2019). Therefore, Pakistan’s real estate sector promises a bright future with the demand for educated real estate agents growing day by day.
However, there are multiple challenges which are faced by consumers, investors, and government institutions in the real estate industry. According to Cussen (2020), a volatile and speculative market leads to fluctuation of prices, and combined with a liquidity risk and economic factors, real estate investment in Pakistan is fraught with risk. Another major hurdle for investors in Pakistan is the practice of price speculation by unregulated agents and advertising campaigns. Real estate scams are also becoming a significant issue (Dawn, 2018). Another challenge which affects all stakeholders in the real estate market is the lack of knowledge related to the real estate sector. This causes investors to make bad investment choices which ultimately leads to the accumulation of dead capital in the economy. Lastly, Pakistan is marred by unresolved land cases due to the frivolous litigation processes involved. Therefore, Pakistan needs real estate education to help generate an environment where investors and consumers feel safe with their investment decisions.
How Can Real Estate Education Transform the Sector?
Real estate education will soon become a decisive factor for success in the future. Demand for real estate education can be gauged from the fact that two institutions in Karachi namely, Pakistan Institute for Real Estate Management (PIREM) and Panjwani Institute of Business Studies and Technology (PIBST), have started offering diplomas and certificates in real estate. Risk and investment go hand in hand, but success is often based on a calculated decision. A proper education in real estate not only develops a deep understanding of the market; it also enables investors to base critical decisions on market trends and verified facts. This can, therefore, mitigate risk from investment portfolios and provide for greater investor confidence and engagement.
Equipped with the right knowledge and a commitment to keep expanding, the proper industry knowledge will save time and also lead to a better return on investments. Awareness of land laws and regulation offers a cloud of legal protection while making real estate deals and protect from getting entangled in lawsuits later. Another primary reason which makes real estate education important is the know-how of market trends and staying on top of market volatility. Lastly, gaining a proper education will allow an individual to learn and collaborate with industry experts. While demand for knowledgeable individuals increases, jobs and a career outlook in the real estate sector will ultimately depend on proper education in the future.
Conclusion
Pakistan’s real estate potential remains largely untapped due to unprofessional and unethical practices of agents, brokers, and consultants. Speculations in markets are used to affect land prices artificially, and this, in turn, causes confusion and deliberation in the investor decision making process. Not only will a proper education become a decisive factor for real estate success, but it will also develop a deep understanding of the market and the processes related to buying and selling of land and property. Therefore, if steps are taken to promote real estate education on a national level, the future of Pakistan’s real estate shows promise.
Key Findings
With the use of technology increasing in the real estate market for conducting and managing processes, demand for individuals with proper real estate knowledge and expertise is increasing day by day.
Pakistan has an attractive real estate market with a promise of growth and expansion.
Volatile market leads to fluctuation of prices, and combined with liquidity risk and economic factors, real estate investment in Pakistan is fraught with risk.
Pakistan needs real estate education to help generate an environment where investors and consumers feel safe with their capital decisions.
There are not many notable institutions in Pakistan that offer real estate courses. It is therefore vital to promote real estate education at renowned universities and institutions for the capacity building of human resource working in the realty sector.
