A COMPARISON BETWEEN PREVIOUS AND PRESENT REAL ESTATE INDUSTRY
Pakistan’s economy is always dependent on the real estate sector. Even during the Covid-19 pandemic, the construction sector corroborated the economy of the country. In the history of Pakistan, the real estate business has shown various fluctuations, but the past decade has proved real estate investment is the best investment for smart investors, which is why we are witnessing more real estate companies coming up with especially high-rise building projects. It is time to foster the changing culture of real estate.
Before we go into the details, we need to understand what real estate is;
“Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general” (Wikipedia Definition)
There are a few main categories of real estate;
Residential real estate is the land used for residence. It includes houses, societies, apartments, duplexes, townhouses and condominiums.
Commercial real estate is the property used for business activities. For example workplaces, shopping malls, entertainment houses, hotels, hostels, warehouses, farmland, garages, car showrooms and medical centers.
Industrial land is the land used for the manufacturing and production of products. Examples include cemeteries, factories and industries.
- Raw land
This type of land is mostly used for cultivation. It may include undeveloped land, farms and orchards.
These types of real estate have different variations and multiple purposes. In Pakistan, the real estate sector was officially started in the 1990s. At that time, potential investors were more interested in the purchase of the residential property. People were intended to invest in developed lands because those lands have improvements and one can easily make money off of them. They could rent out the place or sell it when the price goes up but they did not realize that undeveloped land (raw land) is cheaper to buy and its value is increasing with time.
So initially, residential property was the priority for the investors but later on, when people came to know the worth of real estate investment, they started investing money in different categories of real estate. Meanwhile, more real estate companies started to emerge, and the industry of real estate begins to flourish.
One of the factors that people started to expand their interest in investing, other than residential categories of real estate, was that investors began to analyze the market and optimize the capital gain of their assets. People started to invest in commercial projects, they started to run their own businesses and industries. Investors on the other hand also started building high-rise projects, to provide homes, offices, and retail outlets.
Yet, trends keep on changing with time, and so is the meaning of Pakistan's real estate business. We’ve been witnessing the change from a different perspective for quite some time. In this blog, we will discuss the change that has been noticed in the real estate industry over the past few years.
- Property dealers and real estate companies
Let’s put some light on these two similar professions, yet different subjects in nature. For quite a long time now, the difference between property dealers and real estate companies is prominent in one way or another.
Below are some of the main differences that draw the comparison between both.
- When a company starts to establish, it goes through a certain registration process as well as approved by the legal authorities, where property dealers are occupied with one office.
- A company builds with the proper team and teamwork, while property dealers deal with everything single-handed. The real estate companies have a proper workforce, and dedicated real estate agents who search the market, visit their clients and deal with them more professionally.
- Mostly, property dealers focus on small inventory, which usually generates immediate commission but real estate agencies work on big inventory, which has monthly/yearly installment plans and generates commission according to the plan. These installment plans are convenient and easy to follow for investors.
- Another major factor between the two varies regarding the trust. Investment in any project, run by a real estate company, is risk-free and authentic, because these projects are approved by legal developmental authorities. A real estate company is always an accomplice to the laws of government.
- Real estate companies are growing day by day, and investors are now more inclined towards investing their assets in residential, commercial, or industrial projects, rather than buying a home in old-school ways.
- However, real estate companies are encouraged to take on board property dealers as their affiliate marketers.
Another cause of the change is awareness. People are currently more considerate about buying a property. Previously, there used to be land registrars to keep the record of land, and people were dependent on them.
The times are changing and technology is soaring high above everything. Land digitization is the trend now, cadastral mapping is about to start across the country. So, everyone can get online information about any land through concerned authorities. There will be more transparency and ease while buying and selling the land.
Technology is one of the main parts of the change in the real estate industry. Social media, Artificial Intelligence (AI), Augmented Reality (AR) and advertisement are powerful tools to display the product (before its final shape) in front of an audience across the world.
In the present times, one can easily have the full sample of the building architecture through artificial intelligence and get the renders of the project. There was no sense of advertisement initially when the real estate industry was established, but now marketing plays 60% in selling the project.
Through social media, one can promote the project to the right audience and get the right lead generation. So, technology plays a big part in the projection and selling of the project.
To summarize the above content, here are some of the causes that bring the overall change in real estate. Among one causes that seem to bring the change in the real estate sector is people are no longer intended to destroy the agricultural land. Air is getting polluted, and people prefer more greenery rather than wasting green belt.
Moreover, the actual cause to bring change in real estate is high rise building permission facilitated by the government. As we observe, more people are moving to city life. Due to growing urbanization, multi-storey buildings are more in demand.
Consequently, the reason behind the rising demand for high-rise buildings (mixed-use) is quick access to the office, apartments, supermarkets, and shopping centers under one roof. This policy is also beneficial in terms of real estate investment. More people will invest, more employment will be produced, and more economy will be generated in the country.
These were the few main changes in the previous and today’s real estate industry that we could identify. We hope that this blog is enough to have an understanding of Pakistan's real estate in general.
If you are looking for a best real estate investment opportunity, you can go through the blog Al Hayyat Mall - a project by Al Hayyat Group of Companies, or you can visit our head office at Main Ring Road near Hayatabad Toll plaza Peshawar.
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