Pakistan’s real estate sector can potentially increase economic growth, holding 60-70% of the country’s total wealth. But Pakistan cannot utilise its full potential due to malpractices and low transparency in this sector. It was found that around Rs 4-5 billion get adhered to the real estate sector because of unverified and unapproved housing societies. As per cadastral mapping, the total value of encroached land is Rs 5.59 trillion. Of these, Rs 2.63 trillion encroached lands are only in Karachi, Lahore, and Islamabad. Additionally, as per PropSure Digital Solutions, 36% of the commercial plots in Lahore housing schemes have unknown layout plan approval status.
The encroachment and malpractices arise due to irregularities in the real estate sector. One of the main reasons is the manual land registration system which is inefficient and archaic. This system gives immense power to the patwaris, such as resolving land disputes, demarcating land boundaries, transactions, land surveys, registering land ownership and mutation of records. It is a time-consuming process due to lengthy and manual procedures. This incurs additional costs to the property buyer for obtaining documents. As per the PIDE report, it will take 9 months to get permission from the Capital Development Authority (CDA) in Islamabad for residential construction. The owner has to bear 5% of the total construction cost in this procedure.
The irregularities in the real estate market are increasing wealth speculation. Hence, the “capital trap” has become a significant challenge for investors. Most horizontal and vertical projects launched in Pakistan remain unapproved due to lengthy approval processes and illegal possession of lands. To tackle these problems, Pakistan needs a Digital Property Verification System as it will ensure transparency, eradicate malpractices and create awareness. The digitisation of the system will provide centralised documentation, data tracking, easier financial management and easy maintenance of records.
On the other hand, Digital Mapping of property is also essential because it can provide geographical information to solve problems related to the exact information required for the property. Nonetheless, it will also support the analysis of the site’s location and proximity of any plot of land, which can significantly increase or decrease its overall value due to future development prospects. Digital mapping makes the processes involved in real estate transaction easy and faster and brings transparency in the sector