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In Pakistan, owning a house is more than just shelter; it is a symbol of financial stability and social status. However, this goal is slipping out of reach for many as soaring property prices and real wage decline have made homeownership increasingly unaffordable. Before getting into the extent of this problem, we first need to understand the country’s demographics and how the problem is only expected to amplify.
By 2100, Pakistan is projected to be the third largest country in the world with more than 500 million inhabitants. Based on the average household size of 6.3 per 2023 census, the country potentially faces an annual demand of 977,497 houses. While that foretells a massive planning and resource challenge, the distribution is even more telling.
According to the 2023 census, urban areas, which house 39 per cent of the population, expanded at 3.65pc annually, almost twice the growth rate of 1.90pc in rural areas, driven by the double whammy of high births as well as internal migration. Both this pace and the gap have widened from 2017, when the rate of change for urban areas was 3pc compared to 2pc rural.
The ramifications for housing are significant: the top 20 districts by density contain 83m people, yet occupy merely 5pc of the landmass, according to a new policy brief, “Urbanisation, Housing Supply, and the Credit Gap in Pakistan”, published by the Karachi School of Business Leadership’s InsightLab. What this means is that in the absence of proper metropolitan infrastructure, demand is naturally channelled towards more central locations where the supply doesn’t adjust accordingly, thus putting pressure on prices.
