A open letter to Ishaaq Daar,

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I am writing this article purely as a real estate analyst and have no political affiliation and motive.
The real estate sector in Pakistan has been a leading sector in gain and performance, exemplary not only in this country but the world over. If you compare the gains in terms of foreign currency, the UAE, UK, USA and India all are flat. Only a bit of comparison with Canada can be made. Here, not only does the private developer make available roads, sewage and other basic infrastructure, but even power plants which is exclusively the government’s responsibility. And above all, the government is gaining money in the form of Taxes. Government-backed housing developments like LDA, KDA, etc. could not deliver high- class housing for residents, except CDA. Neither could they uproot corruption, the land mafia, qabza groups etc. But still I will rank their performance as mediocre but not at par with private housings.
Nothing is free of cost. Due to such a boom in real estate the Government is tackling with two mighty powers, namely DHA and Bahria. (Money in Might everywhere). The current Government’s rivalry with these powers is not a new story. The real estate sector is booming so much that it is engulfing many industries, and people are diverting their money to real estate as it is hassle free and the gains are unmatched.
I just listened to the interview of Ishaq Dar. He told that DC rates are exclusively determined by provinces and a lot of power politics and influence is exercised to keep DC rates low. He told that in some parts of Pakistan, DC rates are 1 lac per acre but their real value is 25 Lac. I am not sure but in Lahore certain areas have DC rates about 30 to 40 Percent of their market value. I very well know that a show of power, influential contacts and money is shown at the time of determination of DC rates. From 2007 to 2010 the DC Rate of UET was 1.5 Times the rate of Valencia whereas property in UET was 60% cheaper.
It looks as if the Government is ready to bargain and make the procedure easier. There should be some executive body of real estate agents to bargain with the Government so that the transition be smooth. The proposed procedure is too cumbersome where the FBR will contact you after many months to give you valuation and pay tax. The best thing is for a 3rd party to mediate between the federal Government and the provinces to reach an agreement for DC or FEDERAL RATES. All the procedure of Sale purchase should be a 2-3 days procedure as now.
Overseas remittances are a big chunk of GDP and more importantly, the trade balance. Any breach in confidence will be detrimental for the economy and the whole country.