Pakistan faces a shortfall of over 12 million houses as demand rises following a decline in key lending rates which typically encourages individuals to park their money in real estate instead of banks.
Builders and developers believe reviving housing and construction could generate employment and boost over 70 allied industries, reported a news daily.
Chairman Association of Builders and Developers (ABAD) recently said Prime Minister Shehbaz Sharif appreciated their proposals but does not want speculative trading in property. The premier has asked for revised suggestions within 10 days and is keen to support low-income housing, the chairman added.
The ABAD chairman noted that prices in Pakistan remain half of those in the Middle East despite the cement industry operating at only 30 percent capacity. He urged long-term subsidized financing as done by the previous government. During 2018-2022, over 31,000 houses were financed at fixed subsidized rates.
Banking experts think this isn’t feasible for large-scale financing, as mortgage lending remains underdeveloped in Pakistan. While home financing could enable buyers to pay in installments similar to rental costs, banks are hesitant due to the high risk of default.
Banks still remain reluctant to engage in long-term housing loans.
There might be a shortage of 12 million houses, but that doesn’t mean there is an actual demand for that many homes.
The real issue is affordability—most people simply don’t have the buying power. The only realistic solution is low-cost housing with easy installment plans.
Right now, there are already too many plots available, but property dealers keep pushing people to invest in land that just sits idle instead of being used for real housing.
At the same time, they demand tax cuts and non-filer benefits for buying property. The reality is that 80-90% of Pakistanis earn less than 1 lakh per month. Even if someone manages to save 20,000 PKR every month, it would take 20.8 years to afford a 50 lakh house—assuming there’s no inflation.
Now a person earning 1 Lac per month in above scenario must be a file
This makes it clear that those buying expensive properties are either involved in tax evasion or have undisclosed sources of income. If they keep getting favors, property prices will further shoot up even more, making it impossible for middle-class families to own a home.
In the end, all this noise from the real estate sector is just a way to park black money and keep the property bubble going through speculation and price manipulation.
Comment is more well researched and based on actual ground realities.
My employers have several houses unsold for more than 2 years because dealers pushed the rates way higher than actual prices and people don’t have buying power.
Excellent and well researched comment on actual dynamics. Much Appreciated. Cheers !!
Fake news . People cannot afford housing anymore .
Rents are sky high
No subsidies allowed .
Tax the real estate now . No more freebies .I am happy that real estate should be taxed so this nonsense can be stopped
Pro pk staff was paid for by real estate mafia I see lol
They are begging for govt subsidies when so many people cannot even afford homes anymore .we want housing prices to go down or they can keep their houses .