Why Pakistan’s Mid-Sized Cities Are the New Real Estate Goldmine in 2025

Discover why investors are shifting their focus to mid-sized cities in Pakistan. Explore key trends, infrastructure growth, affordability factors, and top cities driving the real estate boom in 2025.

1. The New Investment Narrative in Pakistan

Pakistan’s real estate scene has traditionally been dominated by the “Big Three” of Karachi, Lahore, and Islamabad. But in 2025, there is a new wave of demand changing the course. Mid-tier cities like Multan, Faisalabad, Gujranwala, Sialkot, and Bahawalpur are now becoming credible real estate choices — for old hands and first-timers alike.

Why this sudden shift? The answer lies in a combination of affordability, infrastructure development, population migration, and rising rental yields. As urban sprawl stretches Tier-1 cities to their limits, Pakistanis are turning to quieter, more affordable, and strategically located cities that offer the promise of long-term growth.

2. Key Drivers Behind the Mid-Sized City Boom

• Affordability & Higher Returns

One of the best arguments’ investors are interested in these cities is affordable entry points. An area of 5 marlas in Lahore’s most desirable areas can cost more than PKR 1.5 crore, whereas the same area in Gujranwala or Bahawalpur can be purchased for less than PKR 40–60 lakh — with rental returns typically above 7%.

• Government Infrastructure Push

Schemes such as motorways (M-4, M-5), ring roads, industrial estates, and special economic zones are converting cities like Faisalabad, Multan, and Sialkot into high-growth areas. The addition of South Punjab Secretariat, Multan Metrobus, and airport upgrades has provided an added incentive.

• Population Growth & Urban Migration

As has happened with major cities becoming populous and costly, people and business are moving to quieter cities. Urban migration is fueling demand for residential, commercial, and rental space in these medium-sized urban centres.

• Industrial & Economic Activity

Economic activity hubs like Faisalabad (textile sector), Sialkot (sporting & surgical exports), and Multan (agriculture & logistics) are centres of economic activity. This means constant employment generation and consistent demand for housing and commercial property.

3. City-Wise Breakdown: Top Mid-Sized Investment Hotspots in 2025

Multan – The Heart of South Punjab

What was once a slow-developing market, Multan has undergone a real estate revolution in the past five years. The completion of Motorway M-5, Multan Metro, Shah Rukn-e-Alam flyovers, and airport expansions have rendered the city extremely accessible.

• Residential Areas Gaining Traction: DHA Multan, Wapda Town, Citi Housing, Model Town
• Plot Price Range: PKR 15 – 90 lakh (5 to 10 marla)
• Rental Yield: Up to 7.5% in DHA and Bosan Road vicinity
• Future Outlook: Rising interest from overseas Pakistanis and developers

Fact: DHA Multan has seen a 30% price increase in some blocks since 2022.

Faisalabad – Pakistan’s Industrial Nucleus

Pakistan’s textile capital, Faisalabad, is equally famous these days for its industrial real estate and logistics corridors. M-4 Motorway and FIEDMC (Faisalabad Industrial Estate Development & Management Company) development is increasing prices.

• Residential Areas in Demand: FDA City, Wapda City, Eden Valley, Sitara Valley
• Commercial Hotspots: D-Ground, Canal Road, Susan Road
• Average Plot Prices (5-marla): PKR 20 – 65 lakh
• Key Investor Tip: Industrial plots along the motorway are now in high demand from warehousing and logistics companies.

Gujranwala – The Northern Corridor Star

Taking advantage of its midway location between Lahore and Islamabad, Gujranwala is experiencing rapid urbanization. Developments such as the Gujranwala Business Center, Citi Housing, and Master City are drawing attention from young investors.

• Why It’s Hot: Proximity to Lahore, rising industrial base, low real estate taxes
• Plot Price Range: PKR 15 – 55 lakh for 5 marla
• Rental Demand: High for 3- and 5-marla homes due to factory workers and student influx

Sialkot – The Export Engine of Pakistan

With a strong SME base in surgical, sports, and leather products, Sialkot has a solid local economy. Its own privately-funded airport is a testament to entrepreneurial power. Sialkot property is quickly becoming a commercial goldmine.

• Key Areas: Sialkot Cantt, Sambrial, Citi Housing Sialkot
• Commercial Demand: Warehousing, showrooms, small offices
• Property Prices: Moderate but rising quickly due to commercial demand

Bahawalpur – Rising from the South

Bahawalpur, with its hygienic environment, university town life, and existence of DHA Bahawalpur, is gaining popularity. It is now established as a serene city with affordable living cost and developing civic amenities.

• DHA Bahawalpur: Offering low-cost plots with excellent installment plans
• Plot Prices: 5-marla plots in DHA starting around PKR 10 – 20 lakh
• Growth Catalysts: Airport, universities, Ring Road plans

4. Rental Yields: A Comparative Edge

As this table shows, mid-sized cities consistently offer higher rental returns than mega-cities — due to lower initial investment and growing demand.

5. Mid-Sized Cities vs. Tier-1 Markets: Why Investors Are Switching

6. What Makes These Cities Ideal for Real Estate Investment

• Ongoing Infrastructure Projects
• Affordable Gated Communities
• Growing Local Employment
• Connectivity via Motorways & Ring Roads
• Greener, Less Polluted Environments
• Market Still in Growth Phase (First-Mover Advantage)

7. Tips for Real Estate Investors in 2025
8. Focus on Infrastructure-Linked Areas
   Plots near new roads, metro bus stations, and ring roads appreciate faster.
9. Buy in Early-Stage Societies
   New societies offer launch-phase discounts with significant future upside.
10. Evaluate Developer Reputation
    Prefer developers with a track record of timely delivery and legal NOCs.
11. Target Rental Hubs
    Near hospitals, universities, and industrial estates — guaranteed occupancy.
12. Diversify Your Investment
    Invest in 2–3 different cities to spread risk and tap into multiple growth corridors.
13. Final Thoughts: The Opportunity Is Now

As Pakistan’s real estate market is undergoing change, mid-size cities are no longer budget options only — they are growth drivers in their own right. For those looking for long-term capital appreciation, high rentals, and lower entry points, 2025 is the year to invest in Multan, Faisalabad, Gujranwala, and other up-and-comers.
The wise investor is no longer chasing past successes of over-saturated markets but is betting where the future is in the making.

Need Expert Guidance?

At EstateX and Apex Group, we specialize in identifying real estate trends, evaluating projects, and helping investors navigate opportunities across Pakistan’s growing cities. Connect with our experts today for personalized investment advice.