Buying a Home in Pakistan: Is It a Good Investment?

Learn about the financial pros and cons of buying a home in Pakistan, including increasing property value, stability, and ownership.

Apr 21, 2023
You must have read many generic articles about renting vs buying a house or an apartment in Pakistan. But today we will compare the financial side of the argument with numbers. So stick around, this is going to be very interesting!

Renting in Pakistan: Pros and Cons

Financial Pros of Renting

Pakistan is a very interesting place for homeowners. Property prices keep going up but the rent doesn’t. At least as much!
  • One of the best parts of renting a home in Pakistan is the low monthly rent payments. How low? According to our calculation from, the average rental yield on residential homes and apartments is 2%-4%.
This means you can live in an expensive 10 crore apartment for a monthly rent of Rs167,000. For a few, this might look too much. So take this example instead. For an average 2 crore apartment or house, the monthly rent can be as low as Rs33,500.
Interesting isn’t it? Stick around more interesting numbers are coming!
  • Now that you don’t have to pay as much, you can put that money into a savings account and earn cash on it. How much? *At least 15% to 18% in 2023.
This means if you have one crore with you, you can make Rs133,333 per month. Pay Rs33,500 as rent and you will still be left with ~Rs100,000!!
Do this for 6 months and your vacation is free!
That’s awesome!

Financial Cons of Renting

  • Rents will go up 10% each year like clockwork. If your landlord is gracious, you can bargain for a number less than that. But that’s a cost that you have to bear!
Still compared to the price jumps your landlord is seeing (data below), this 10% is nothing. And if your landlord is living outside Pakistan, you can bargain for a lower increase! We did that and is it working for us!
  • Be ready for maintenance issues and your landlord might ask you to cough that money out. No matter what that’s a sunk cost because you don’t know for how long you will be living in that house! Your landlord might kick you out on a month’s notice.
This brings us to a few emotional sides of the argument.
  1. You don’t have stability. If your landlord finds a better renter, he will ask you to pack your things and leave within 1 month (stick around till the end, we have a trick to share).
  1. You don’t like the way a specific thing looks? Your likeness doesn’t matter! For even minor changes you have to talk to your landlord. It’s in the contract! Unless you go ahead with the thing and hope that the landlord doesn’t notice.
What if you buy the home?

Buying a Home in Pakistan: Financial Pros and Cons

Financial Pros of Buying

We analyzed the data from to see the price jumps in built-up houses and residential properties from 2012-2022.
Prices of Residential properties have gone up every year by a massive 15%! House prices have gone up by 13%. This is too good!
notion image
While you have no rent to pay, your property value is increasing.
The argument against it can be how does it matter? You won’t sell your only house. Correct! What if you want to switch cities or move out of Pakistan? Won’t it be great then?
This brings us to the emotional side of the argument.
  • The biggest advantage of owning a home in Pakistan is stability and ownership. You won’t have to worry about being evicted.
  • Your rents won’t be raised unexpectedly.
  • Don’t like the look of something? break it down and create a masterpiece. No one can you a question!

Financial Cons of Buying

  • We talked about monthly income from the money you put aside by not buying the house. Say bye-bye to that! Yes, your house value is going up, but you can’t spend that. Unlike the passive income stream you created.
  • All the taxes that you had no idea about, now you have to pay them. They add up!

Now the emotional side!

  • You are stuck in this house for life unless you decide to sell it. For that, you need to find a broker, pay him fees, invite buyers to look at the place, be ready for their complaints and then finally after a few months you can sell it.
  • Unless you are leaving the country, the next place you choose to live in will be more expensive than the place you have. I hope that you have the cash to pay the difference.

Making the Right Choice for Your Future

When choosing between renting and buying in Pakistan, think about what you want first.
Buying a home can give you:
  • Capital gains
  • Stability and
  • Ownership
While renting can give you:
  • Passive income on the cash you have kept by not buying the house
  • Liberty to move anywhere
  • Rent the most expensive house that you couldn’t buy
But before making any decision, consider your budget and financial health when making this decision. If you have a steady income and good credit, buying a home may be a good option for you. But if you’re struggling to make ends meet, renting may be the only choice. Make sure you take a close look at your finances and plan for the long term before making a decision.

So which one would you choose: Buying or renting in Pakistan

We wrote this piece to first explain that rent isn’t as bad as we think! It has its own advantages. So if you don’t have the money to buy a place for your family right now, don’t fret about it. Enjoy the perks.
If you have money, you might have seen the benefits of renting and at the same time the gains owing a house can give you.
With all this in mind, decide what’s best for you and your family! Cheers
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