Housing Shortage in Pakistan | Government Steps for Houses Shortage in Pakistan | Real Estate

The system to produce stable housing units is needed, however, we are way far from achieving such milestones. The hopes might be up, and the government might be willing to put their funds into this but without proper planning, better managers, and forecasting this might become a national-level issue. 

The housing shortage is not new. The government always knew we were short of houses right from the start. The Real estate industry was left under the hands of private sectors, without any regulatory body to improvise them.

The shortage of houses is a crisis present all around the globe. This article features Pakistan and explores the measures that the government has taken to counter this crisis.

Therefore, this article caters following points:

A Never-Ending Need

Pakistan housing shortage Right Now

A Crawling Necessity

Projection of Future Houses

Conclusion

Source: Dawn News

A Never-Ending Need

Is there a housing shortage? The need for housing is imminent for society to work. People lying on footpaths, under bridges, roads, pavements, or in any barren land which they call home is indeed proof of how much housing is lacking in society. 

Many wealthy families are forced to live in suburbs and dwellings with little to no facilities, cracks in the walls, exhausted furniture, and leaking ceilings. Not to mention, realtors coming to your doors now and then. A picture like this is not least enjoyable and begs the question of how much we have developed as a society?

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Source: Profit Pakistan

Pakistan Housing Shortage Right Now

Before the housing shortage in 2020, it had a population of 207.7 million people according to the 2017 census and has expanded at a rate of 2.4 percent per year over the intercensal era. Its urban population, on the other hand, has increased at a pace of 2.7 percent per year over the same period, reaching 75.5 million people.

This means we are growing on a massive scale with other needs such as food and clothes being catered by most private sectors and government hand in hand, the ‘a roof over the head’ is still left unchecked. 

As per the government, they have recognized this issue but don’t seem to join lines together. However in my Digitalization of property in Pakistan article (Linked Below). The Government has recognized a federal regulatory body to manage the properties and digitalize the whole process making it secure, easily accessible, and convenient for overseas Pakistanis. All that is left is a central regulatory authority which is termed as RERA, Real Estate Regulatory Authority.

Read More: Digitalization of Property by FBR| Real Estate for overseas 

Pakistan's annual urban housing need is 350,000 units. Lower-income groups receive 62 percent, lower-middle-income groups receive 25%, and higher and upper-medium-income groups receive 10%.

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A Crawling Necessity

The lower-income group is the most vulnerable sector of society that doesn’t have stable income nor enough assets to bargain loans from the bank. This makes it harder for these groups to build or own a house and have to spend the majority of their life savings on house building. 

The Pakistan government has made a contractual obligation on itself, NPHS Naya Pakistan Housing Scheme. A housing project that will build houses up to 5 million. Curbing an annual need of 1 million but such numbers are not enough to stop the growing total housing need of more than 10 million. With the non-stopping need of population and is the most populous nation in the world, steps must be taken. 

Read More: How to Solve shortage of affordable Houses in Pakistan | NHPS

Source: Youngstars. pk

The annual supply is around 150,000 on average without any factors contributing to growth by the government i.e NPHS. The land is divided into two different sectors as stated by the government i.e government land occupation and subdivision which are also known as “Kachi Abadis” or squatter settlements and even the agriculture land division.  

The banks were a bit tardy when it came to financing houses through loans and mortgages making the housing shortage in 2021 even more severe. The mortgage was non-existent until 2020 where mortgage became a thing of Naya Pakistan, as claimed by Imran Khan. The Banks, especially the National Bank of Pakistan favored such steps and introduced friendly house loans. By friendly, the idea was to make it easier for lower-class people to obtain loans without them being discouraged by complicated matters. House building Finance Company HBFC, was established for this purpose. 

Projection of Future Houses

The URC in Karachi thinks that significant urban land reform is required in Pakistan. A policy like this would entail a high non-utilization charge on land and property, as well as an urban land ceiling legislation that would prohibit any single person from owning more than 500 square meters of urban land. Similarly, no settlement shall have a population density of fewer than 400 people per hectare, and no person who has previously taken out a loan for house construction should be offered another loan. 

It is difficult to accomplish such an urban land reform in the face of a robust developer lobby and elite interests. However, given the shifting political landscape in Pakistan and the activity of the higher courts, such a discussion is possible.

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In Conclusion

What will happen to the housing market in 2021? The Shortage of houses will be solved sooner or later if the government keeps up the initiatives of NPHS and others. On the other hand, the real estate sector is mostly held by private sectors such as Bahria Town, Indus Enclave, ASF, DHA, and many more. They provide the houses but the cost is way higher for a lower-income to afford and as we have seen, the lower-income group takes up to 62% of the housing market.