Transforming real estate and construction industry | Political Economy

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The housing and construction sector contributes 2.53 percent (Rs. 380 billion) to Pakistan’s GDP and employs 7.61 percent of the labor force. The industry is expected to grow in the coming years due to several factors including migration from small towns to cities, China-Pakistan Economic Corridor and ongoing restructuring efforts.

However, the housing sector faces significant challenges. Pakistan needs about 700,000 housing units annually. Demand is growing at about 3 percent annually. Only half of this demand is being met. Newly constructed units often have quality, maintenance and affordability issues.

These issues not only affect homeowners but also allow market forces to manipulate supply and demand, ultimately affecting both the quality and price of homes. As a result, many home buyers find themselves in a difficult position, paying a lot of money for homes that do not meet the expected quality standards.

Apart from market exploitation, there are growing concerns about the capacity of enterprises and their ability to deliver optimal results. Over the years, our construction methods have become outdated because we have not adopted modern technology to enhance key processes. There has been little innovation in construction methods, especially in terms of the use of green and sustainable materials, which can help us move towards more environmentally friendly construction.

It is important to note that many countries around the world are facing similar challenges. The construction industry worldwide has been characterized as traditional, project-based, fragmented and highly complex. However, developed markets such as China’s Hong Kong SAR, Singapore and Dubai have excelled through innovation, technology adoption and collaboration.

McKinsey’s report on the future of construction highlighted key areas where real estate and construction businesses need to learn and improve. The report recommended an industrial approach to construction. Adoption of new content; digitizing products and processes; and developing new capabilities for innovative construction projects.

Although this report was published several years ago, its insights are highly relevant in the Pakistani context. In a recent presentation for the second Sindh Expo in Hyderabad, I suggested the following directions for transforming our industry:

Apart from market exploitation, there are growing concerns about the capacity of enterprises and their ability to deliver optimal results. Over the years, our construction methods have become outdated because we have not adopted modern technology.

A structured approach to the project life cycle: Although public sector projects use planning commission forms for project planning and execution, these forms are rarely used for post-construction facilities management. The private sector also reflects this decline. The challenge is not in using these forms but in adopting a framework that considers the entire project life cycle from initial design to demolition, where facilities management is considered an essential step.

Digital framework: Establish a digital design, construction, and facilities management framework that uses Building Information Modeling to facilitate information exchange between project stakeholders, along with BIM implementation plans and ISO 19650. go BIM enhances visualization, conflict detection and stakeholder communication, ultimately reducing rework and delays.

Modular construction and 3D printing: The exploration of modular construction and 3D printing could revolutionize home construction. By manufacturing components in factories and assembling them on site, we can reduce construction time and improve quality control. Modular construction can reduce construction times by up to 50 percent, as components are manufactured simultaneously with site preparation.

Green and lightweight materials: To promote environmentally friendly construction practices, prioritize the use of local, sustainable materials. This includes exploring options that can reduce transportation costs and reduce energy consumption. Such materials can significantly reduce the carbon impact of construction.

Education of new talent: Investing in the education of the next generation of construction professionals is critical to fostering innovation in the sector. This includes promoting STEM (Science, Technology, Engineering and Mathematics) education and vocational training across Pakistan.

This strategy can help reshape Pakistan’s housing and construction landscape, making it more resilient, efficient and sustainable. Innovative practices, educational initiatives, and a focus on sustainability can help address current challenges and position the industry for growth and innovation.

The author is Assistant Professor of Construction Management and Quantity Surveying at Bond University, Gold Coast, Australia and a registered architect with the Pakistan Council of Architects and Town Planners.