Key Takeaways
- Two distinct property markets are emerging in Pakistan.
- Luxury properties are becoming unaffordable due to weak transaction volumes.
- Prime Minister’s cheap housing scheme supports lower-end demand.
Pakistan’s property market is experiencing a significant divide, with luxury properties becoming increasingly unaffordable while genuine housing demand remains robust, according to a seasoned property dealer.
The dealer, working out of DHA Multan and Model Town, noted that residential prices have risen by 20-25 percent since the US-Iran war began, indicating a shift in the market dynamics.
The market is now segmented into two distinct categories: one supporting genuine housing demand, and another driven by speculative investments, particularly from undeclared assets.
At the lower and middle-end of the market, the Prime Minister’s cheap housing scheme, which allows financing of up to Rs. 10 million at a fixed 5 percent rate, is providing support to genuine housing demand.
However, at the higher end, the story is different. Expensive plots and luxury properties are becoming too expensive due to weak transaction volumes, making them unaffordable even for the rich.
The dealer warned that this does not necessarily mean a big property crash is imminent, but rather that the market could behave differently by location, property type, and price bracket.
Gulf pressure is also influencing the market. The disruption in the movement of Pakistani money into Dubai has redirected some funds towards Pakistan, supporting demand in established areas across urban Punjab and Karachi.
Policy changes, such as the reduction in withholding tax for property purchases and sales, are adding another layer of complexity to the market. From July 2026, the tax for property purchases was reduced to 1.25 percent for filers, while sales were taxed at 2.75 percent.
The dealer emphasized that the real test for the property market is liquidity. A property can be worth Rs. 800 million on paper but mean little to the owner if nobody is willing to pay more than Rs. 400 million.
It means the market could behave very differently by location, property type and price bracket.
A seasoned property dealer, Working out of DHA Multan and Model Town
