ISLAMABAD (Eshfak Mughal):- The net Foreign Direct Investment (FDI) in country’s real estate and construction sectors decreased during last fiscal year despite different housing schemes were launched by the federal government.
It is pertinent to mention here that the skilled and unskilled labor work force of the country is heavily depending for jobs on these sectors after agriculture sector.
According to a document compiled by they State Bank of Pakistan (SBP), the net foreign direct investment decreased by $6 million during the last fiscal year in the real estate sector. The outflows were recorded at $9.3 million while inflows were only $3.3 million in the country’s real estate sector.
The net FDI in the real estate was also decreased by $0.5 million during the fiscal year 2020-21. The document shows that outflows were witnessed at $15.5 million and inflows were $15 million in the sector during the period.
The data shows that the net FDI is decreasing from last couple of years in real estate sector.
The net FDI in the construction sector has been remained almost half during last one year. The document shows that the net FDI was reduced by $76 million from $155 million to $79 million during the last fiscal year 2021-22 as compared to fiscal year 2020-21. The net FDI was recorded at $79 million during the last fiscal year 2021-22 as compared to fiscal year 2020-21. The inflows were recorded at $87.7 million while outflows were $8.3 during the last fiscal year, according to the data.
The reduction in the net FDI in these sectors was witnessed despite that government has launched some mega projects in real estate to provide homes to the middle and lower middle class at cheaper rates.
The federal government has launched Nayal Pakistan Housing Scheme, Mera Pakistan Mera Ghar Scheme etc during last three years.
It is also important to mention here that Pakistan has a backlog of roughly 10.3 million housing units. The number of people without a place to live is predicted to rise to 17.4 million by next three years, According to different studies.
Former Chairman of the Association of Builders and Developers (ABAD) Arif Jeewa told ProPakistani that there are different reason of reduction in FDI in real sector.
He said that the overall hyperinflation in the country and more than cent percent increase in cost of material during two years has created difficulties for real estate sector. The government has also increased taxes rates of real estate which have triggered the situation.
Jeewa said that the policy discount rate has been increased to 15 percent which is also discouraging the investment in the real estate, he further stated.
The figures of the document show that these government mega schemes could not attract foreign investors. understand the ins and outs of the real estate industry, market players believe.
Investors’ confidence and interest in real estate investment prospects might be damaged if housing developments are delayed. In the property and construction industries, trust between investors and stakeholders is the key to their continued success. It’s a critical yet delicate issue that has to be addressed, a leading real estate company further elaborates the situation.