When Zeeshan and Imran Ali Khan moved to Pakistan in 2006 to set up an online real estate company, they didn’t really know what they were getting themselves into.
Back then, buying or selling a house in Pakistan was a cash-heavy, offline experience. Internet penetration was about 6.5%, and there was little market transparency — people lived in fear of unwittingly purchasing or renting houses on illegally occupied land. There were no trustworthy digital real estate portals. But the brothers saw an opening. They were ambitious first-generation immigrants to the U.K. who had graduated with engineering degrees from Imperial College and Oxford and spent years launching online businesses from their London apartment.
By the time the brothers arrived in Lahore, they were seasoned entrepreneurs, having started a range of businesses in the early and late aughts, including an Alibaba-like e-commerce website, an air filter distribution company, and even a small gym. In 2006, along with their third brother, Haider, they set up Zameen, an online real estate service. This was the mid-2000s, and much of the property in Pakistan’s biggest cities was cartelized or controlled by the military. In parts of the country, the informal nature of ownership enabled the practice of kabza, the illegal occupation of land or housing by powerful locals. Low digital literacy rates made it difficult to reach potential buyers and sellers, and an underdeveloped payment infrastructure made things even more complicated. The simple idea of Craigslisting real estate meant overcoming a barrage of obstacles.
Now, 15 years later, the company claims to have 5.5 million monthly users and has digitized more than a million land plots and housing units. Every month, it registers roughly 500,000 new listings, and local real estate agents estimate that 70% of all sale and rental transactions in Pakistan are initiated through Zameen, which means “land” in Urdu. More than that, however, the company transformed the way property sales work in Pakistan, the most urbanized country in South Asia. While the market used to be dominated by brokers who kept a tight grip on housing costs and availability, formerly private information is now available to everyone.
For the first six years of Zameen’s operation, the brothers were preoccupied with other businesses, and the country was dealing with its own problem: 2009 was one of the bloodiest years on record for Pakistan. Terrorist attacks targeting civilians and security forces killed 3,021 people, according to the Pak Institute of Peace Studies (PIPS), and extremists controlled tribal areas bordering Afghanistan. At that point, Pakistan was among the most dangerous countries in the world, with thousands emigrating to the U.S., U.K., and Canada. To international investors, the founders struggled to dispel “this errant notion of [Pakistan] being a troubled place where nothing is flourishing,” as Zeeshan later explained. But the brothers continued to believe that the company could work.
Prior to Zameen, newspapers were the dominant medium for advertising real estate in Pakistan. Agents preferred an offline, person-to-person approach, as many had trouble using technology. “Zameen used to send SMS leads to agents,” said Zeeshan. “They would even struggle with using SMS properly.”
Quality control was another problem. Listings had to be manually checked for fakes and price gouging. Unlike in developed markets, in Pakistan “there are no safeguards like escrow account services and mandatory regulation to protect both consumers and developers,” says Omer Nadeem, a housing market expert at Islamabad-based think tank Tabadlab. As of December 2019, there were more than 1.8 million pending court cases, many related to property disputes.
At the same time, since 1990, Pakistan has been in the midst of a massive urban migration. A recent study revealed that 10 cities account for 54% of the total urban population of 75 million. Around 2012, in the midst of this transition, owning property in urban areas became desirable. Interest was driven by wealthy expats buying properties back home, and sales were fueled by military-led housing projects and $70 billion in Chinese infrastructure investment. Nadeem estimates that parts of Karachi and Lahore saw the value of a plot of land rise by 400% between 2008 and 2013. Hungry for quick returns, Pakistani buyers began aggressively flipping real estate, as an initial investment could be doubled within a few years. “Real estate, I don’t think it has had a bust cycle. It’s generally boomed over the years,” says Nadeem.
Zameen caught this wave. They ran local television ads targeting expats and diaspora Pakistanis. Noting an opportunity, the brothers closed most of their other businesses to focus on the site. “That was a great decision,” says Imran. By 2013, they’d signed up more than 3,000 real estate agencies across different states in Pakistan to provide them with listings. In out-of-the-way areas where brokers didn’t know how to use computers, they offered training and hired tech-savvy teenagers as “computer operators” to upload photos of properties.