Pakistan’s obsession with real estate is a strange paradox: almost every single household has lost money in some sort of fraud, and yet, it continues to be the preferred avenue of investment for the majority. From middle-class professionals to business tycoons, pretty much everyone has parked their funds in plots or property in general.

According to the national accounts, real estate activities have a gross domestic product of Rs2.32 trillion in constant prices, or roughly 5.8 per cent of the entire economy. However, these are just the official statistics and do not capture the activity taking place informally, where, unfortunately, the lack of data makes assessment quite difficult.

One could try to estimate the extent of it, but probably nothing sums up the state of things better than the frequent real estate amnesties successive governments introduce to whiten parked money.

While talks of the latest amnesty fell apart amid concerns regarding the International Monetary Fund, the 2021 edition saw more than 2,100 projects avail of the scheme. Back in 2018, when the incentives were not limited to a specific sector, 14.6pc of all the assets happened to be in real estate.

Market-driven solutions that align incentives with improving service delivery can lead the way to formalising the real estate sector

As a result, the problems of informality dominate most conversations regarding real estate. Unfortunately, things aren’t particularly great even in the formal area. Overpromising, delay­­ed handovers, and subpar projects are routine complaints among customers who typically have little recourse to get their contractual rights. The choice is between years of fatigue in the lower courts or just making peace with what they have gotten. Most people choose the latter since the bare minimum is the standard practice.

This........

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