5. The Overseas Pakistani Dilemma
Overseas Pakistanis particularly those based in the Gulf, the UK, and North America have historically been the backbone of Pakistan’s high-end real estate market. Remittances fund a significant portion of property purchases, and overseas buyers tend to invest in larger plots and premium developments.
But this segment is uniquely vulnerable to fraud, and in 2026, that vulnerability continues to suppress confidence and investment flows.
The reasons are straightforward: overseas buyers cannot frequently visit to verify developments in person. They rely on agents, family members, and marketing materials all of which can be manipulated. Common traps that overseas investors fall into include:
- Fake housing scheme promotions targeting diaspora communities on social media with promises of rapid development and guaranteed returns
- Unverified agents collecting booking fees and disappearing
- Illegal societies that appear legitimate in glossy brochures but lack any official approval
- Currency and transfer risks when repatriating investment returns
Gulf region geopolitical tensions in early 2026 added another layer of complexity. With uncertainty affecting Pakistani workers in the Middle East who account for roughly 54% of Pakistan’s total remittances — new investment inflows slowed even further. When the primary source of real estate liquidity becomes uncertain, market confidence suffers at every level.
The emotional dimension of overseas Pakistani investment also makes fraud especially devastating. For many expats, buying property in Pakistan is not purely financial it is tied to identity, family, and the dream of returning home. Losing those savings to fraud carries a psychological weight that goes beyond monetary loss.
Read more on protecting overseas investments at Milkiyat’s Guide for Non-Resident Pakistanis Investing in Property.
6. Political Instability and Policy Uncertainty
Investor confidence is impossible to build in a politically unstable environment — and Pakistan’s political landscape over the past several years has provided anything but stability.
Frequent changes in government, economic mini-crises, IMF bailout negotiations, and abrupt policy reversals have created an environment where long-term investment planning feels risky. Real estate projects typically take three to seven years from launch to delivery. Investors need confidence that the rules — tax rates, capital gains structures, foreign currency regulations will remain broadly stable over that period.
They have not been getting that confidence.
Key policy pain points that have shaken the market include:
- Shifting tax structures: Withholding taxes, federal excise duties, and capital gains tax on property have been changed multiple times, making financial projections unreliable
- Inconsistent incentive programs: Amnesty schemes and tax incentives announced with fanfare have sometimes been reversed or not renewed, leaving investors in limbo
- Construction industry regulations: Building codes and zoning regulations have been applied unevenly, creating uncertainty for developers about what can legally be built and where
There is a silver lining: the 2025-26 Federal Budget did include some property-friendly measures, including reductions in withholding tax and the elimination of Federal Excise Duty on commercial plots. But until these signals translate into consistently enforced, long-term policy stability, cautious investors will continue to sit on the sidelines.
7. Rising Construction Costs and Delayed Deliveries
Even from buyers who willingly commit to a legitimate, approved housing project, the confidence crisis has a third dimension: will the project actually be delivered on time?
The answer, in Pakistan’s real estate market, is often: probably not.
Delayed delivery is one of the most common complaints among property investors. Developers may face funding issues, regulatory hurdles, construction challenges, or simply poor project management. What was promised as a 2-year development stretches to 5, then 7, then indefinitely.
Skyrocketing construction costs have made this problem worse in 2025-26. As cement, steel, and labor costs rose sharply, some developers found that the revenue from pre-sold plots at original prices was insufficient to complete development at current costs. The result: construction slows, buyers wait, trust erodes.
This problem is particularly acute for buyers who have taken out loans or redirected personal savings into a development expecting timely possession. When possession is delayed by years, the financial and personal cost can be severe.
Some warning signs of a project at risk of delivery delays include:
- Vague delivery timelines in sale agreements
- Limited construction activity visible on site during visits
- Developer changing payment terms mid-project
- Absence of a construction escrow or trust account protecting buyer funds
Milkiyat’s Developer Due Diligence Checklist can help buyers assess a project’s likelihood of on-time delivery before committing.
8. The Media-Real Estate Nexus: A Conflict of Interest
One of the most under appreciated factors fueling Pakistan’s real estate confidence crisis is the deep entanglement between the country’s media landscape and its property developers a relationship that systematically distorts public information about the sector.
Research has documented a striking pattern: six of Pakistan’s most prominent real estate developers each own a television news channel. Of Pakistan’s 31 licensed news channels, these six developers control five — representing 16% of the media market. The channels involved include major names in Pakistani news broadcasting.
The implications for real estate reporting are serious. Media outlets owned by developers have an inherent conflict of interest when reporting on:
- Regulatory actions against illegal housing schemes (including their own)
- Market downturns that might discourage buyers
- Government enforcement campaigns targeting fraudulent developers
- NAB investigations into property corruption
When the gatekeepers of public information about real estate are simultaneously some of the largest real estate sellers in the country, objective reporting becomes structurally difficult. Buyers relying on media coverage to make informed investment decisions cannot assume the information they receive is independent.
This media-developer nexus also extends to social media. Influencer marketing has become a significant driver of real estate sales in Pakistan, with celebrities and online personalities promoting housing schemes sometimes illegal ones to their followers. Regulatory oversight of this advertising is minimal.
For unbiased property news and market analysis, bookmark Milkiyat’s Real Estate News Pakistan — a platform committed to editorial independence from developer interests.
9. What’s Being Done — And Is It Enough?
To be fair, 2025-26 has seen a genuine uptick in reform efforts aimed at addressing the confidence crisis. The question is whether these efforts are sufficient, sustained, and structurally meaningful.
NAB’s Online Property Information System: The National Accountability Bureau has launched an online portal linking standard operating procedures, layout plans, and approval details of private housing societies. The system aims to allow buyers, overseas Pakistanis, and investors to verify a project’s legal status before making any payment. Development authorities from all districts are expected to provide verified layout plans to NAB for inclusion in the centralized database.
CDA Enforcement Actions: The Capital Development Authority has taken a multi-pronged approach in Islamabad publishing lists of unapproved projects, issuing show-cause notices, sealing offices of illegal developers, and filing criminal cases against repeat offenders. The 2026 list of 98 unapproved projects in Islamabad’s Zones 3 and 4 represents a meaningful transparency effort.
NAB Chairman Reforms Announcement: The NAB Chairman outlined measures requiring future housing projects to regulate plot transfers through proper authorities, discourage cash transactions in favor of banking channels, and ensure that housing schemes do not sell more plots than the land available a direct response to the file-overselling scandal.
Budget Measures: Reductions in withholding tax and elimination of Federal Excise Duty on commercial plots aim to reduce the transaction cost burden and stimulate legitimate market activity.
These are meaningful steps. But experts argue they fall short of what is needed:
- A single national digital land registry remains incomplete
- Mandatory escrow accounts for pre-sale buyer funds have not been legislated
- Independent real estate regulatory authority at the federal level has not been established
- Marketing regulations for real estate advertising — including social media — remain inadequate
10. How Buyers Can Protect Themselves
While systemic reforms take time, buyers can take concrete steps to protect themselves in Pakistan’s current property market. Due diligence is no longer optional — it is essential.
Before signing anything:
- Verify the NOC Check directly with the relevant development authority (CDA, LDA, SBCA, RDA) whether the project has a valid, current No Objection Certificate. Don’t accept developer-provided documentation without independent verification.
- Confirm land ownership Request title documents and verify ownership records through official provincial land record portals.
- Check the developer’s track record — Research whether the developer has successfully delivered previous projects on time. A pattern of delays or legal disputes is a major red flag.
- Review the sale agreement with a lawyer Never sign a property agreement without independent legal review. Pay particular attention to delivery timelines, penalty clauses, and refund provisions.
- Prefer banking channels over cash — As NAB has emphasized, transactions through banking channels create a paper trail. Developers insisting on cash payments are a red flag.
- Prioritize ready-to-move-in properties In the current environment, finished properties with confirmed possession offer dramatically lower risk than off-plan investments.
- Use verified platforms Consult Milkiyat’s Verified Property Listings to find properties that have been screened for legal compliance and developer credibility.
