Transforming real estate and construction industry
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he houses and construction sectors account for 2.53 percent (Rs 380 billion) of Pakistan’s GDP and employ 7.61 percent of the labour force. The industry is expected to grow over the coming years due to several factors, including migration from small towns to cities, the China-Pakistan Economic Corridor and ongoing restructuring efforts.
However, the housing sector faces significant challenges. Pakistan requires nearly 700,000 housing units annually. The demand is growing at approximately 3 percent a year. Only about half of this demand is being met. Newly constructed units often have quality, maintenance and affordability issues.
These problems not only affect homeowners but also allow market forces to manipulate supply and demand, ultimately impacting both the quality and pricing of homes. As a result, many homebuyers find themselves in a difficult position, paying substantial amounts for homes that do not meet expected quality standards.
In addition to market exploitation, concerns are growing about businesses’ capacity and capability to deliver optimal outcomes. Over the years, our construction methods have become outdated as we have not embraced modern technology to enhance key processes. There has been little innovation in construction practices, particularly in terms of using green and sustainable materials, which could help us transition to more environmentally friendly construction.
It is important to note that many countries around the world face similar challenges. The construction industry worldwide has been characterised as being traditional, project-based, fragmented and highly complex. However, developed markets like Hong Kong SAR of China, Singapore and Dubai have achieved optimal performance 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 industrialised approach to construction; the adoption of new materials; digitalising products and processes; and nurturing new talent for modern construction projects.
Although the report was published several years ago, its insights remain highly relevant in the Pakistani context. In a recent presentation for the second Sindh Expo in Hyderabad, I proposed the following directions for transforming our industry:
In addition to market exploitation, concerns are growing about businesses’ capacity and capability to deliver optimal outcomes. Over the years, our construction methods have become outdated as we have not embraced modern technology.
Structured approach to project lifecycle: Although public sector projects use Planning Commission forms for project planning and execution, these forms rarely account for post-construction management of facilities. The private sector also mirrors this shortcoming. The challenge lies not in using these forms but in adopting a structured approach that considers the entire project lifecycle, from early design to demolition, where management of facilities is regarded as an essential step.
Digital framework: Establish a digital design, construction, and facilities management framework that utilises Building Information Modelling, along with BIM execution plans and ISO 19650, to facilitate information exchange among project stakeholders. BIM enhances visualisation, clash detection and stakeholder communication, ultimately reducing rework and delays.
Modular construction and 3D printing: Exploring modular construction and 3D printing can revolutionise home building. By manufacturing components in factories and assembling them on-site, we can reduce construction time and improve quality control. Modular construction can reduce build times by up to 50 percent, as components are produced simultaneously with site preparation.
Green and lightweight materials: To promote eco-friendly construction practices, prioritise using local, sustainable materials. This includes exploring options that can lower transport costs and reduce energy consumption. Such materials can significantly decrease the carbon footprint of construction.
Educating new talent: Investing in the education of the next generation of construction professionals is crucial for fostering innovation in the sector. This involves promoting STEM (science, rechnology, engineering and mathematics) education and vocational training across Pakistan.
These strategies can help reshape Pakistan’s housing and construction landscape, making it more resilient, efficient and sustainable. Integrating modern practices, educational initiatives, and a focus on sustainability can help address current challenges and position the industry for growth and innovation.