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Effects of Political Instability on the Real Estate Industry of Pakistan

Political instability

It is an undeniable fact that a healthy political environment is crucial to boost the economy of a country. Contrary to that, an unstable and chaotic political situation may hinder progress. Political instability impacts the market and like many other businesses, the real estate market is also strongly influenced by uncertain political dynamics.

World Bank estimated that approximately 60-70% of a country’s stored wealth is in real estate assets. As per the Pakistan Bureau of Statistics, the real estate market value of Pakistan is between $300- $400 billion, which is about 2% of Pakistan’s total Gross domestic product (GDP).

A study by the Pakistan Institute of Development Economics revealed that the real estate sector plays a vital role in the economy of a country. Handicapping this sector would result in dire consequences and a crippled economy. So, the sector must be given significant space to flourish and strengthen the economy.

The twists and turns in the political scenario of Pakistan have influenced the real estate sector. This blog will help you understand how political instability can doom the real estate business and how you should respond to the undesired market trends.

Fear and low confidence

Political instability persuades the decision of selling and buying properties. The fear of an insecure future and low confidence in political decisions influences the psyche and social behavior of people at large. Often people sell their assets and move abroad.

In a hastened manner, owners compromise on the actual monetary value and try to sell their properties at low-cut prices. On the other hand, buyers hesitate to buy properties even at low prices. Developers become skeptical and withhold new schemes and projects.

Imbalance in supply and demand

This situation leads to an imbalance between supply and demand. Despite the dropped prices and plethora of options for investment, nobody is willing to invest except for a few investors who take the advantage of the situation and invest in real estate.

What you should do?

To tackle the situation effectively and refrain from huge losses, it is recommended to hold your ground fast and not panic. Stay educated about the new policies and do thorough research before making any decision. Why?


  1. Every political party has its agenda and policies. It takes time to implement new policies which may delay the developmental process of projects.
  2. The taxation, laws, and regulations for real estate projects and properties are variable
  3. Although the growth rate may fluctuate, the industry will not vanish entirely
  4. The rates of construction materials and properties are escalating with each passing day. Selling a property at cheaper prices today may lead to buying properties at higher rates tomorrow


It is evident that political unrest affects the real estate industry and promotes negative trends in the market. But instead of panicking and selling your assets for nominal prices, wait for the feasible times. Any decision made today in a rush and fear can result in hefty losses tomorrow. Keep a keen eye on the market trends and current affairs to stay updated regarding new policies. Just be patient, take a calculated risk, and wait for the storm to pass. Keep reading realtorspk blog for more informative blogs.

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