Affordable housing |
A HOME is more than a physical structure; it provides psychological security, financial resilience and social stability. Post World War II, home ownership was considered a passport to middle-class status in countries that are considered developed today. Therefore, access, particularly to attainable housing, is not merely a policy objective, but a fundamental socioeconomic necessity.
Pakistan faces a substantial economy housing shortfall, estimated at 10 million units, with an annual addition of approximately 350,000 units. This reflects a combination of demographic pressures, rapid urbanisation, and evolving household structures. Yet the issue extends beyond numbers. Housing also carries considerable macroeconomic significance. It accounts for 25 per cent of core inflation, linking it closely with interest rates and broader price stability. At the same time, housing demand itself is influenced by inflation and borrowing costs, creating a two-way relationship between monetary conditions and home-ownership.
Broadly, three sources dominate housing finance: household savings, developer financing and formal financial institutions, including banks and microfinance institutions, typically account for 50pc to 70pc, 20pc to 40pc, and only 5pc to 20pc, respectively, in emerging markets. The same pattern is reflected in Pakistan with an estimated 80pc to 85pc of housing finance originating from informal sources and comprising personal savings and developer-led arrangements.
Mortgage data in Pakistan is often understated. While it is commonly said that mortgages account for less than 1pc of private........