Factors to Make Real Estate Investment in Islamabad

Written by: Neelam Shahzadi

Reviewed by: Majid Hussain

July 27, 2023

Islamabad real state is predicted to continue its growth trajectory in 2023, offering lucrative returns on investment. Characterised by scenic beauty, world-class infrastructure, and an exceptional quality of life, Islamabad stands as a meticulously planned city. The city presents a wealth of investment opportunities through its burgeoning population, robust economy, and affordable prices of properties for sale.

This article serves as a guide to both first-time and seasoned investors, covering real estate investment factors in Islamabad and real estate in Pakistan overall.

Factors to Consider When Investing in Islamabad

Whilst buying and selling property in Islamabad may appear to be promising, it largely depends on extensive research and groundwork. The following factors which investors should consider first before diving into real estate investment apply to Pakistan real estate overall:

Budget

Before finding a property to buy, it is crucial for investors to have a clear understanding of their budget and financial goals so they can narrow down their search on some property selling websites in Pakistan and avoid wasting time browsing on properties beyond their financial reach.

“Determining the budget before starting property search helps investors streamline the process.”

Considering factors such as maintenance costs, taxes, risk appetite, mortgage prices, and interest rates can help them stay within their budgetary constraints, especially if they are on a tight budget. Opting for residential and commercial properties in Pakistan in installments can be a viable option for budget-conscious buyers.

Purpose

Real estate investors should have a clear understanding of their purpose and expectations, especially regarding their desired outcomes, anticipated yields, and holding power (whether for short-term or long-term gain). They must first determine their intentions for purchasing a Pak property—for a personal residence, commercial space to establish their business, or to generate rental income—before looking into real estate websites in Pakistan.

Their investments should align with their specific needs and objectives. For those seeking monthly returns, being a direct owner house for rent in Rawalpindi or Islamabad can be a viable option. Another trend of Islamabad buy and sell of plots may be worth considering for long-term investors.

Property Type

Real estate business in Pakistan offers a diverse range of real estate investment options that cater to various preferences and investment goals, including residential, commercial, and industrial, each with its own advantages and disadvantages.

The type of property an investor chooses will significantly impact their return on investment. Residential property Pakistan tends to be more stable, offering a consistent stream of rental income. Commercial land for sale in Pakistan, on the other hand, may yield higher rental returns but also come with higher associated risks.

Project Details

Gathering information about the developer, assessing their reputation, examining their track record, evaluating their credentials, and verifying their legal status help investors make informed decisions and invest in real estate Pakistan that appears reliable and promising. It is also important to review the payment plans, delivery timelines, and the features and facilities the on-sale property offers.

Another critical aspect to consider is the condition of the Pakistani property, as well-maintained properties are more likely to be highly valued and command higher rental prices. Investors should take into account factors such as the property’s structural integrity, maintenance history, and any necessary repairs or renovations.

Location

Location plays a pivotal role in real estate investment. The best Pakistan houses and commercial spaces are in desirable areas that provide convenient proximity to schools, public transportation, shopping malls, and other essential amenities. Buyers should invest considering their lifestyle and convenience.

Legal Considerations

Numerous real estate projects are currently underway in Pakistan, each with its own legal status. Investors usually find property authorised by the relevant departments with the necessary NOCs (No Objection Certificates) due to their legality and absence of issues.

Investing in NOC-approved societies offers several advantages, such as better profitability over time, greater development speed, enhanced quality of life for residents, and greater benefits in terms of property buy and sell opportunities, as their legality and adherence to regulations instil confidence in potential buyers, resulting in increased property value and potential profits.

Real Estate Agent

In Pakistan, it is generally advisable to enlist the services of a real estate agency for any property-related transactions, as they can offer an objective perspective that may be lacking in other involved parties. They can ensure all necessary details are thoroughly covered and essential boxes are checked.

“Real estate agents in Pakistan stay levelheaded, objective, and can take the heat for their client if necessary.”

Pak real estate agents are great mediators too in houses buying. They have the ability to remain level-headed and handle any challenging situations on behalf of their clients. Moreover, they can assess Pakistan houses for sale without bias, highlighting both its strengths and weaknesses to facilitate decision-making.

Pros and Cons of Investing in Islamabad Real Estate

There are more compelling reasons for investing in real estate in Islamabad than cons. Here are some:

Word-Class Infrastructure

The real estate market in Islamabad showcases high standards of construction, design, and amenities due to the diligent oversight and regulation of the Capital Development Authority (CDA), which monitors every for-sale home and development activity within the city. CDA, per se, provides real-time online real estate updates on which housing societies are NOC-approved.

The government of Islamabad is heavily investing in the city’s infrastructure, undertaking projects such as the development of new roads, bridges, and public transportation systems. These initiatives enhance accessibility and boost the city’s appeal to potential buyers, leading to increased demand for housing and subsequent rises in property prices.

High Demand

Islamabad’s growing population, projected to reach 2.5 million by 2025, has created a surge in the demand for housing and commercial facilities. This population growth serves as a key driver behind the flourishing real estate market in the city. The demand for residential properties in Islamabad remains high and is anticipated to experience further growth in 2023, according to property news Pakistan. The same goes for commercial properties.

High ROI

Compared to other cities in Pakistan, Islamabad’s real estate market offers higher returns on investment. From January 2022 to January 2023, the average prices of houses and flats in Islamabad witnessed respective increases of 9% and 11%, indicating a positive growth trend.

Secure Market

Another contributing factor to the growth of the real estate market in Islamabad is its strong and thriving economy. Unlike securities, such as stocks, equity, exchange-traded funds, mutual funds, or certain real estate markets that may exhibit volatility and unpredictability, the real estate market in Islamabad remains stable and secure.

With the establishment of numerous new businesses and industries, the job market is expanding, attracting a growing number of people to the area and subsequently increasing the demand for housing and other means to invest in real estate, including government-sponsored enterprises or private mortgage securities such as REIT. The city’s robust economy makes it less susceptible to the impact of economic downturns.

Portfolio Diversification

With a multitude of investment options in Islamabad, investors can choose to buy and rent out residential properties, invest in commercial properties, or participate in real estate development projects. Almost every property website in Pakistan provides multiple listing service to widen the options for all kinds of investors. They have the flexibility to invest in a single property or create a portfolio of properties, depending on their investment goals and risk appetite.

Political Center

With notable political landmarks like the secretariat, Pakistan house, president’s house, and national assembly building, Islamabad holds significance as a hub for political activities. Moreover, the city serves as a venue for both domestic and international political events, conferences, and sessions dedicated to addressing significant political matters in the country. Due to its geopolitical importance, Islamabad enjoys heightened security measures compared to other cities, making it an attractive and secure location for real estate investment.

Tourist Attractions

Aside from being a prominent hub for political activities, Islamabad holds a significant place in the tourism landscape. The city boasts a rich array of attractions, ranging from historical mosques and monuments to breathtaking natural beauty and scenic locations. Tourism serves as a vital pillar of the city’s economy and the surrounding regions, marketing real estate on the side.

Affordability

Amidst the expansion and reliability of Islamabad’s real estate market, the average for land price in Pakistan remains comparatively affordable when compared to other Pakistani cities, presenting an opportune moment for investors to venture into the market and capitalise on the favourable pricing before they rise.

Tax Benefits

Real estate investors in Islamabad enjoy a multitude of tax advantages, such as the ability to deduct mortgage lending interest payments, property taxes, and depreciation expenses, offering potential savings and financial benefits.

However, as what the real estate business is in general, diving into the sector without being fully equipped with knowledge and other crucial considerations may lead to downfall for investors, forfeiting their investment’s potential instead. It is wise for first-time buyers to navigate the market with a real estate expert alongside.

The Most Trusted Real Estate Agency in Islamabad

Venturing into real estate investment in general, not just in Islamabad, can be very tricky. Scams and frauds are always lurking in the corner. Moreover, without proper market knowledge and navigation skills, ROI potential can easily be forfeited.

These are a few of the least discussed real estate investment factors, but Legend Properties is here to guide every client to all they know about the sector. The firm has gained a reputation as the most reliable realtor in Islamabad and throughout Pakistan, focusing on Islamabad properties, knowing fully the capital city’s high ROI potential. Reach us today!