Effect of oil prices on the real estate business in Islamabad12

The price of fuel has a significant impact on the economies of almost all South Asian nations because they are all net importers of oil. According to industry analysts, Pakistan’s economy would benefit from lower oil prices because oil imports make up around one-third of Pakistan’s total import expenditure. However, the market’s economy is severely harmed by the growing cost of fuel and oil.

The cost of building materials increases with an increase in the price of oil. With prices skyrocketing, home affordability and project building issues are being heavily emphasized.

Inflation is brought on by rising petroleum product prices, which has led to frightening statistics for citizens of Pakistan.

The rising prices are burdening the middle and lower classes even more. Most obviously, the nation as a whole is concerned about the increase in the price of gasoline. The cost of goods, including everything from machinery to basic foods, has increased in addition to the price of gasoline. The real estate business is significantly impacted by this.

Even though Pakistan’s real estate sector has experienced remarkable growth in a short period, the rising costs of building materials force real estate projects to constantly rethink and review their budgets and funding for the project. This leads to project delays and abandonment, which put further pressure on the market when it comes to supplying the property.

Common Material Whose Cost is Incremented with Increased Oil Price


Bricks are one of the oldest, sturdiest, and most dependable building materials. The grade and kind of brick used in the building can significantly impact the price of bricks. As the oil prices increases, the fuel needed to bake the bricks also increases, so bricks price for every grade increase. This is the main justification for why large real estate projects could extend their budgets.


Another necessary component for building homes is cement. With the increase in oil prices, the material and machinery cost increases, and transportation cost also increases. The cost of cement is skyrocketing, much like other items on this list that are being debated. The project timelines, which take years to fulfil, are once again impacted by these rising expenses.


Steel is another incredibly valuable building element. Like brick costs, steel prices have been skyrocketing as well. Property developers for buildings under development are aware of the worries about these escalating prices.

The price per kilogram has increased significantly on its own. The amount of steel needed is measured in tons. The cost of just one component has caused prices in the real estate development industry to soar.

The main factor that puts pressure on the market and allows steel producers to raise prices in response to increased demand is the high price of oil.

The causes of the price increase in steel are related to difficulties with importation or shipping, a scarcity of scrap, and the two costs needed to get the steel for building activity.

The most prevalent material that experienced a sharp price increase was steel bars, but other steel goods, including angles, pipes, sheets, and girders, are also seeing price increases in real estate construction because of higher manufacturing costs and rising demand.

Final Thoughts

One after another, Pakistan’s real estate sector has produced some incredible new construction. Although the cost of property has increased, Pakistan’s real estate market has faced significant obstacles in recent years.

The real estate market has also been significantly impacted by the rising cost of oil, which is used in almost everything. The true difficulty arises when real estate developments that advance society are put on hold just because building materials have increased in price.

The project management is under continual pressure from the demand for their projects, which occasionally results in abandoning their construction altogether.

This might also provide a significant challenge for people who want to construct their own homes. But there are several wise choices one can make to make sure their home building will stay within their allocated budget. Your best bet for reducing the rising expenses of real estate development may be to shrink your home, create an efficient floor plan, and build it yourself.