PSX vs. Real Estate in Pakistan: Historical Returns, Liquidity, and Tax Differences

Property and shares are the two assets many Pakistani families think about when they have savings to invest. Property feels safe and visible. Shares feel fast and risky. This guide puts the two side by side on four questions: what they returned, how easily you can get out, what it costs to get in and out, and how each is taxed in 2026-27.

This is general information, not financial or tax advice. Property data in Pakistan is patchy, and tax sources disagree on some details. Both are flagged below. Confirm current rules with the FBR or a registered tax adviser before any transaction.

The Short Version

	PSX (KSE-100)	Real estate
Price return, end-2015 to 27 Oct 2026	About 5.0x (32,816 to 164,467), roughly 16% a year	No reliable 10-year national index found (see below)
Income	Dividends (taxed at source)	Rent, gross yield about 5.7% to 7.2%
Liquidity	Sell in seconds, cash in T+2	Weeks to months, sometimes longer
Entry cost	Brokerage and small levies	Registration costs plus 1.25% advance tax for filer buyers
Exit tax	15% CGT for a filer on shares bought after 1 July 2024	2.75% advance tax for a filer seller, plus 15% CGT on gains for property acquired after 1 July 2024
Volatility	High	Low on paper, because prices are not quoted daily

Historical Returns

Shares: the KSE-100

Year-end	KSE-100 close	Change in year
2015	32,816	+2.1%
2016	47,807	+45.7%
2017	40,471	-15.3%
2018	37,067	-8.4%
2019	40,735	+9.9%
2020	43,755	+7.4%
2021	44,596	+1.9%
2022	40,420	-9.4%
2023	62,451	+54.5%
2024	115,127	+84.4%
2025	174,054	+51.2%

The index closed at 164,467 on 27 October 2026, so it is below its end-2025 level this year. These are price figures and exclude dividends. Almost all of the 10-year gain came in the last three years: the index was roughly flat from end-2016 to end-2022. A reader who started in 2016 and sold in 2022 would have lost money. For more on the recent run, see our PSX performance over the last 5 years.

Property: what the data does and does not show

We could not find a reliable, independently audited national house price index covering 2016 to 2026. What we did find:

• Global Property Guide, using data from a large property portal, reported nationwide house prices up 5.05% in the year to Q1 2019, which was a fall of about 4% after inflation. Lahore was +6.25%, Karachi +4.25% and Islamabad +7.01%. That page contains no 5- or 10-year figures.
• The same source said land values rose 2.6 times from 2011 to 2018 (measure not stated).
• Many property blogs publish “average annual appreciation” numbers, but we found none that disclose a method or a source index, so we do not repeat them.

The honest position: property prices in Pakistan have risen in nominal terms over long periods, but a precise 10-year return depends heavily on city, area and the exact plot. Asking prices are not transaction prices, and official valuation rates (DC and FBR rates) often lag the market. Do not compare a headline property “return” with the KSE-100 figure without checking how it was measured.

Rental income

Global Property Guide, using Zameen data for Q1 2026, reports average gross rental yields:

City	Gross yield
Islamabad	7.16%
Karachi	7.14%
Rawalpindi	6.64%
Lahore	5.74%
National average	6.67%

These are gross, before tax, repairs, agent fees and vacancy. The same source says net yields typically run 1.5 to 2 percentage points lower. That puts a realistic net yield at roughly 4.5% to 5.5% before income tax. Shares pay dividends instead, which vary by company. See our PSX dividend investing guide.

Liquidity

Factor	PSX	Real estate
Time to sell	Seconds to place the order, cash on T+2 settlement	Weeks to months to find a buyer at your price
Selling part of your holding	Easy, any number of shares	Usually impossible
Minimum investment	One share, or a mutual fund unit	Typically a large lump sum
Price visibility	Live quotes	Estimates, agent opinions, comparable sales
Risk of being unable to exit	Low in normal markets, but circuit breakers can limit selling on bad days	High in slow markets, and documents or title disputes can block a sale

Liquidity cuts both ways. Shares are easy to sell, which also makes it easy to sell in a panic at the bottom. Property’s illiquidity forces patience, which some investors find helps them avoid selling at a low. Do not treat that as a return advantage: it is a behavioural effect, not a feature of the asset.

Tax Differences in 2026-27

Tax sources describing the Finance Act 2026 do not all agree, so the figures below come from one consultancy summary dated 13 August 2026 and should be checked against the FBR before a deal.

Property

Tax	Filer (on the ATL)	Non-filer
Section 236K, advance tax paid by the buyer	1.25%	10.5% up to Rs 50 million; 14.5% for Rs 50 to 100 million; 18.5% above Rs 100 million
Section 236C, advance tax paid by the seller	2.75%	About 11.5%
Capital gains tax on property acquired on or after 1 July 2024	15% flat, no holding-period relief	Higher

Other points from the same source:

• Both 236C and 236K apply to the higher of the declared price or the official valuation. They are adjustable against your annual tax.
• The late-filer category has been removed from most property withholding provisions.
• Section 7E, the deemed income tax on immovable property, is reported as abolished. The source gives no effective date.
• The same source describes an abolition of Capital Value Tax on certain assets held by resident Pakistanis as proposed. It does not say whether it was enacted. We did not find a reliable figure for stamp duty or provincial registration fees, so budget for those separately and ask a local lawyer.
• Early budget summaries cited 1.5% for 236K before the final 1.25%, so older articles may show the wrong rate.
• Rental income is taxed as income. We did not verify the current slab, so check the FBR schedule.

Shares

Tax	Filer	Non-filer
Capital gains, shares bought after 1 July 2024	15%	Slab rate, minimum 15%
Dividends (section 150)	Generally 15%	Generally 30%

Details and conflicting sources are covered in our guides on capital gains tax on PSX stocks and filer vs non-filer withholding tax. Being on the ATL matters for both asset types: see how to check your ATL status.

Worked Example: Rs 10 Million in Each

These are illustrations of the tax mechanics, not forecasts. Assume a filer, an asset bought after 1 July 2024, and a 50% gain over the holding period.

Item	Shares	Property
Purchase	Rs 10,000,000	Rs 10,000,000
Tax and levy at purchase	None for CGT; small brokerage	236K at 1.25% = Rs 125,000
Sale value	Rs 15,000,000	Rs 15,000,000
Tax at sale	15% of the Rs 5,000,000 gain = Rs 750,000	236C at 2.75% = Rs 412,500 (adjustable), plus 15% CGT on the gain = Rs 750,000
Time to complete the sale	T+2	Not predictable

The 236C and 236K amounts are advance taxes that you can set against your annual tax liability, so they are a cash-flow cost rather than a final loss. Registration, agent and legal fees, and brokerage on shares, come on top and are not included here.

Which Suits Which Investor?

• You need access to cash within a few years: shares or funds are easier to exit, but you must accept price swings. Property can trap capital.
• You want regular income from a lump sum: property rent can provide a steady yield around the figures above, but needs management and carries vacancy risk.
• You can invest small amounts monthly: shares and mutual funds allow this. Property generally does not.
• You want to hold through a long inflation cycle: both are used for this. See our comparison of gold, stocks and real estate as inflation hedges.
• You value low day-to-day volatility: property’s prices are not quoted daily, which is partly an illusion. Its value can fall without you seeing it.

Final Thoughts

The KSE-100’s 10-year gain is large but came in a burst, and long flat stretches show how much the starting year matters. Property data is harder to pin down, so be cautious with any single “returns” claim. Shares win on liquidity, small ticket sizes and low upfront cost. Property wins on a steady, if modest, rental income and on the fact that some investors can hold it more calmly. Whichever you choose, be on the Active Taxpayer List first: it changes your rate on both.

Related Guides on PakGains

• Explore the stock market hub, the PSX hub and the start-here page
• Pakistan Stock Market (PSX) Beginners Guide
• KSE-100 Index Explained
• PSX Performance in the Last 5 Years
• PSX vs NYSE: 2023 to 2026
• Gold Investment and Trading in Pakistan
• Use the PakGains tools page and the charts page to follow the market

Sources: KSE 100 Index year-end closes, Wikipedia, KSE-100 close on 27 October 2026, Pkrevenue, Gross rental yields in Pakistan, Global Property Guide, Pakistan residential property price history, Global Property Guide, Property Tax Pakistan 2026-27: 236C and 236K Rates Explained, BACO Consultants