Real estate experts have urged the federal government to announce some productive incentives for new investors aimed at avoiding diversion of real estate investment from Pakistan to other neighbouring countries.
Appreciating the federal government's efforts for fixation of property value, they said the government in consultation with real estate stakeholders has fixed property valuation, which is acceptable to all sectors. However, they said there is need for announcing incentives for new investors to attract more investment in the real estate sector.
Shaban Elahi, a real estate expert said the current scenario in the real estate market is very alarming as real estate transactions in all major urban areas have come to a standstill.
He said foreign investors are also reluctant to invest in real estate sector in Pakistan and presently, looking for investment opportunities in other countries. The rising exchange rate is also reflecting that flight of capital has started, he said and added that the dollar has surged to Rs 106.50 in the open market. After the 18th Amendment, taxes pertaining to land transactions are totally a provincial issue, however the provincial government, which in fact has the right to fix land prices, is totally silent on the issue. "It is obvious that the property valuation issue is shattering the confidence of local and overseas Pakistanis, who have been investing billions of dollars in the real estate sector for the last few years," he added.
Shaban said despite that fact the property valuation issue has almost been resolved, the confidence of the depositors has still not been fully restored. "It seems that lack of confidence has resulted in flight of capital from Pakistan to Dubai, which is apparent from the way the Dubai market is rebounding after a big slump," he added. He said in the larger interest of real estate sector and keeping foreign exchange reserves high, the Finance Bill 2016 would need to be reviewed with new provisions to restore the investor confidence.