FPCCI calls for action to curb excessive speculation in real estate market

KARACHI: The government should consider stronger measures to dampen what could be speculative real estate transactions in industrial estate across Pakistan, a business leader said on Saturday.

Nasir Khan, vice president of Pakistan Chamber of Commerce and Industry (FPCCI) said establishment of new industries and expansion of the existing ones are being seriously hampered by the unproductive speculative trading in the dedicated industrial real estate across Pakistan in Export Processing Zones (EPZs) and Special Economic Zones (SEZs).

Khan met and conveyed his concerns in writing to Makhdoom Khusro Bakhtiar, minister for Industries & Production on speculative trade in real estate sector.

The government must intervene immediately and impose restrictions on real estate buying and selling for profiteering and make sure that industrial plots are only reserved for setting up industries and nothing else," he said.

Khan expressed his dissatisfaction that there have been announcements for EPZsand SEZs for Balochistan over the past 20 years by various successive governments, "but nothing concrete on ground has been achieved".

Khan also recommended devising regulatory and statutory mechanisms for protecting the industrial land; along with offering industrial plots to genuine industrialists on nominal rates through well-defined binding terms and conditions.

"Above-mentioned measures will bring FDI and attract private-sector investments – and, will result in industrialization, import substitution, economic growth and employment generation," he added.

The real estate market in Pakistan has proved to be the most lucrative investment destination for the past three decades. The mouthwatering returns combined with low tax and valuation absorb a major chunk of investable capital seeking quick returns.

The budget 2018-19 included several measures to bring order in real estate sector which is a destination known for parking ill-gotten money and has been instrumental in increasing the size of the informal economy by pushing legal capital into a grey area.

The government, however shelved all proposals, including tax real estate income as business income, planned to curb speculative trade.