Where the real estate market is going and specific evidence that supports it

Posted by Hadi Ali on April 19th, 2021

The real estate industry is heading towards the boom as ‘new normal’ phase is started after Covid19 impact. Here we shall discuss how real estate industry is moving forward and what you need to know.

       Table of contents

1. What influences the real estate market?
2. What will happen to real estate market in 2021?
3. What increases real estate value?
4. What causes land prices to increase?
5. What will happen to house prices in 2021?
6. How does real estate contribute to GDP?
7. Why real estate is important?
8. Is real estate the biggest industry?

What Influences the Real Estate Market? What you need to know

Stable economy impacts all the positive on every business including real estate. Moreover, firm economy attracts more investors who add in overall situation of the economy. If the country is having better security situation, good Gross Domestic Product (GDP), and financial stability, people will be able to invest more in real estate market.

The Pakistan real estate remains fluctuate over the time due to various terrorist attacks in the past and overall law and order situation.

What Will Happen to Real Estate Market in 2021?

Corona virus pandemic hit harder all the segments of life all over the world. The real estate industry also got effected by the pandemic and suffered a lot. Experts predict that the post pandemic era will be termed as the recovery of all the businesses.

Pakistan real estate also suffered very much due to extremism and terrorist activities in the past and COvid19 in the present. Now, the dust is getting clear and things are moving towards the better situation in ‘new normal’.

What Increases Real Estate Value?

Value of everything is determined with a famous law of supply and demand. When the supply at minimal level and on the other hand, demand hit hard the market, the value ultimately rises. The bidding war starts among the buyers and they demand higher for the property.

It ultimately benefits the sellers. Likewise, the formation of the property in terms of maintenance and renovation also increases the value of the property.

What Causes Land Prices to Increase?

As discussed above, the rule of supply and demand causes the land prices to increase. An area with high demand will cost more as compared to the one which is neglected. As a general rule, the area defines the value of the land.

For example, a remote area will cost differently as compared to the one which is situated in any capital city. If the construction gets slower and the need of the land increases, it causes the high prices. Well maintained land with proper documentation attracts the clients.

Likewise, a better irrigation system is also mandatory for high prices.

How Does Real Estate Contribute to GDP?

The real estate industry is an important business in Pakistan because it involved more than 200 other businesses with it. Form labor to the industrialist, everyone is beneficiary of this industry. Sadly, it contributes only 2% in the GDP growth of the country.

The point is, the potential is not being utilized properly, therefore, the outcomes rendering at the minimum level. The industry is worth more than 500 billion dollars but it is not utilizing the potential as it has within.

For that reason, the taxes should be reduced by the government and the setup should be shifted to the latest technology to gain the maximum benefits.

Why Real Estate Is Important?

Investing in real estate bears much importance than other businesses including stock estate. It provides great opportunity in terms of cash flow and low risk to loss. In stock market for example, you do not own anything in physical shape but purchase the shares.

Moreover, the stock market fluctuates a lot which turns down in recession sometimes. On the other hand, with the rise in population, the demand of luxurious life is booming. So, investing in real estate will definitely increase the possibilities of maximum revenue generations.

Is Real Estate the Biggest Industry?

According to federal statistics, the real estate is adding about 13% in GDP growth in USA. In this view, the real estate industry is emerged among the most influential businesses of the time. As for as rest of the world is concerned, the property industry is equally important for the general public simultaneously.

It will be difficult to called that whether the real estate is the biggest industry or not, but we can say that it is among the most important businesses because a major chunk of the population is attached to it.