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Transforming Real Estate in Pakistan through Blockchain: An Agent-Based Simulations Study

Author

Listed:
  • Ghulam Mustafa

    (Pakistan Institute of Development Economics)

  • Muhammad Hamza Amjad

Abstract

Blockchain technology has the potential to transform Pakistan`s industrial sector, particularly the real estate market, by enhancing transparency, reducing transaction costs, and minimising market frictions. While blockchain adoption is increasing globally to improve market efficiency, Pakistan remains behind in integrating this technology. This study aims to bridge this gap by simulating the impact of blockchain adoption on real estate market efficiency, focusing on Islamabad. Using an Agent-Based Modeling (ABM) approach, the study tests four key hypotheses: (i) the effect of blockchain on transparency and fraudulent cases, (ii) its impact on average sale time and liquidity, (iii) the role of price discovery in the absence of traditional dealers, and (iv) changes in transaction costs due to blockchain implementation. The simulation results reveal that blockchain adoption significantly enhances market efficiency by reducing asymmetric information, increasing transparency, improving liquidity, and drastically lowering transaction costs. Through tokenisation, smart contracts, and decentralised ledgers, blockchain disrupts the role of intermediaries, leading to a more efficient and transparent market. By eliminating dealercentric liquidity and introducing decentralised mechanisms, Islamabad`s real estate sector can achieve true price discovery based on supply-demand dynamics rather than speculation. However, the Capital Development Authority (CDA) plays a crucial role as both regulator and innovator. Balancing blockchain`s disruptive potential with existing legal and institutional frameworks is essential for its successful implementation in Pakistan`s real estate sector.

Suggested Citation

  • Ghulam Mustafa & Muhammad Hamza Amjad, 2025. "Transforming Real Estate in Pakistan through Blockchain: An Agent-Based Simulations Study," PIDE-Working Papers 2025:12, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:wpaper:2025:12
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    References listed on IDEAS

    as
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