CPEC and Its Impact on Economy and Real Estate

In this article, we will discuss how and where the CPEC would have its impact. The Proportion of impact and volume depends on the government and private sector that could utilize all this and convert it to a positive revenue for the economy.

Many other economic benefits would be highly anticipated in the economy however we must be sure as all of the economic gains that come from this would produce a high increase in housing demand. Real estate is one of the major highlights that we would be discussing today.

CPEC: What are the Promises?

As the reports and press release suggest, Pak-China Corridor preserves a corporate contribution towards different sectors for both, as the majority of people would be benefited through their investments. The linkage of various economic sectors such as trade and infrastructure is in line with other major factors, such as bilateral investment, automobile industries, trade and logistics, and Real Estate. As stated on CPEC official website, their vision includes:

1. Energy and Financial Corporation
2. Tourism and promotion of people to people communication
3. Contribution and corporation to livelihood areas
4. Development in Human resources and socio-economic development such as development in uplifting poverty, medical facilities, and treatment, Training and employment opportunities, Water and necessities provisions, Educational developments.
5. Integrated Transport and IT Systems, these include Railroad, Port, and air channels.
6. Data communication channels and infrastructure development
7. Spatial Zones, Industrial Parks, and functional Zones.

Impacting Economy: What are the Major Injections for Real Estate

So let’s review what the reports clarify: CPEC is a 3,218 Km road that is said to be functional by 2021-2022. The Route comprises mainly the Gwadar seaport along with additional milestones such as greater pipelines, seaport, highways, Air transports, Railways, and lastly a stable infrastructure ending at Kashgar.

1. Employment

If we consider and calculate the number of employment opportunities created, we would have an amount close to 1.2 Million. These jobs are direct jobs, which means other indirect/complimentary/inclusive/exclusive jobs would exceed the population’s “influx of labor force”. The influx of labor force means the rate at which the labor force increases its number/force, which is directly proportional to population.

As reports suggest the influx of labor forces would be primarily due to the CPEC projects. The totality of 42 projects exists under the CPEC initiative, whereas as many as 22 projects have been completed so far. Figure 1 shows the number of jobs created as a result of infrastructure-based projects which are divided into further domestic workers and foreign workers. This graph also shows the number of real estate projects that would house such laborers of this project and also along with the other projects.


 

2. Industrialization and its corporation

There has to be some multiplier effect related to Real Estate and Industry? We can say with certainty that CPEC was able to produce many economic zones or industrial zones, depending on the region. These zones would hold industries that would take the limelight and reap the rewards. The resultant growth of industry would naturally bring revenue that would uplift other industries, “Industrial Cooperation”. Bringing more investments, increasing employment opportunities would need to be accommodated through construction and real estate. The graph below shows how much revenue is expected from such cooperation between industries. 

Conclusion

The CPEC would be highly promising for both the countries, as the matter at hand is development and economic growth. Employment and industrialization would soon be the key factor when it comes to the real estate growth in Pakistan. Karachi in particular would soon be joining the highest growing market and becoming an investment hub.

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