Ayesha Saba

Experts have increasingly highlighted the urgent need for comprehensive legal and administrative reforms to unlock the true investment potential of Pakistan’s real estate sector, long considered the country’s most promising yet persistently underregulated market.

“The root cause of stagnation in Pakistan’s real estate investment climate is the lack of a transparent and unified land record system,” said Adnan Ahmed, a consultant at Rawaha Estate and Builders. “In Pakistan, especially in urban centres like Karachi and Lahore, overlapping jurisdictions and outdated record-keeping have created an environment where land titles are constantly in dispute,” he pointed out while talking to WealthPK.

“This legal ambiguity deters both domestic and foreign investors who demand clarity and legal certainty before committing substantial capital. Administrative bottlenecks also compound the problem,” Ahmed added. He explained that acquiring construction permits or land-use approvals can take months due to red tape, manual documentation, and corrupt practices at various levels of government.

“Investors face massive delays and hidden costs, which significantly increase project risks and reduce the sector’s overall competitiveness,” he noted. Ahmed added that unless the ease of doing business in this sector improves, the real estate market will continue to lag behind regional benchmarks. Ali Raza, a property law specialist, said that currently land and property matters are managed independently by provinces, leading to policy fragmentation.

“You cannot have different policies for different provinces and expect coherent development,” he added. “There should be a federal framework that lays down uniform rules for registration, valuation, and dispute resolution.” Moreover, he pointed out that the taxation regime applied to property transactions is viewed as both cumbersome and punitive.

He said that the combination of capital gains tax, stamp duties, and speculative transaction penalties often leads investors to operate in the informal market, avoiding official channels altogether. He called for a simplified and incentivised taxation structure to promote documentation and formal sector participation.

Raza said that Pakistan’s property sector could be a significant engine of growth — provided it is backed by robust legal reforms, digitised land records, streamlined administrative procedures, and coherent federal regulation. “Without these structural changes, the sector will continue to fall short of its massive potential, depriving the economy of a key driver of investment and employment.”

Credit: INP-WealthPk