Impact of Covid on Pakistan Property Market

The coronavirus epidemic has badly impacted the world and Pakistani economies (COVID-19). Micro, small, and medium-sized businesses have been particularly hard hit by the COVID-19 outbreak (MSMEs). The reason for this essay is to examine the impact of the COVID-19 epidemic on these enterprises and to offer policy recommendations to assist MSMEs in decreasing business losses and surviving the crisis. We used an exploratory approach, which included a thorough study of the existing literature, including policy documents, research articles, and reports in the field. In addition, we used an online questionnaire to collect data from 184 Pakistani MSMEs to contribute empirical evidence.

The information was evaluated using descriptive statistics. According to the findings, the majority of the participating businesses have been significantly impacted. They are dealing with various challenges, including financial, supply chain disruption, decreased demand, decreased sales, and profit, among others. Furthermore, over 83 percent of businesses were unprepared or had no plan to deal with such a circumstance. Again, almost two-thirds of participating companies said they would not survive if the lockout lasted longer than two months.

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Reduction on Property prices:

In 2018, the real estate sector in Pakistan had to deal with challenges, as we saw a shift in regime due to policy issues. This recession was a terrific deal for investors back then, and now that the COVID-19 pandemic has struck, the real question is how many land values will decrease. To figure out what to do, we need to look back at the Great Recession of 2008, which slashed property prices by over 20% worldwide.

Economic condition

The real estate market will perform well in the global market if the country’s economic conditions are favorable. When economies do well, investors invest their money, and demand for real estate rises as a result. This occurs because real estate in Pakistan interacts with other businesses and marketplaces. On the other side, the property market may implode if the country’s economy is failing and declining over time. When investors learn that the economy is in trouble, they withdraw their funds, leaving the real estate market with financial losses.

Limited Resources for Real Estate Education

In Pakistan, finding a recognized or qualified real estate expert is rare. Most people are operating this business solely based on their prior experience. It will make a huge difference to have knowledgeable and accredited property agents on the market. Real estate experts with a thorough understanding of the industry can put their abilities to the greatest possible use to maximize the sector’s genuine potential. There has been an uprise in the requirement for qualified real estate agents due to the digital revolution in the property business in recent years. The Panjwani Institute of Business Studies and Technology (PIBSAT) and the National Institute of Real Estate Management (NIREM) are now the only two reputable institutions that provide real estate courses.

Commoner buying power

Local Pakistanis’ purchasing power is dwindling. On the other hand, Middle Eastern nations have implemented legislation requiring private firms to cut employee compensation by 40%. The current real estate bubble will continue to burst.

Inventory issues

In real estate, a supply-demand imbalance could lead to inventory problems. For example, the number of current listings in a certain location may decrease while the percentage of potential buyers rises. Real estate losses due to such situations because a possible buyer drops out. Inventory difficulties can also cause cap rate compression. Cap rate compression is defined as an increase in the price of commercial real estate without a matching rise in rental income.

Conclusion

MSMEs account for approximately 90% of Pakistan’s national enterprises and provide 40% of the country’s GDP and 40% of export revenues (Shah, 2018). This research looked into the impact of the COVID-19 outbreak on Pakistani MSMEs to aid policymakers and practitioners in streamlining methods to help these enterprises cope with the current crisis. To the best of our understanding, this is the first study to carefully gather data on the impact of the COVID-19 outbreak in Pakistan.