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Pakistani Government can easily build 5 Million Homes

Pakistani Government can easily build 5 Million Homes

Pakistan is facing the severe shortage of housing that has crossed 10 million mark. There is need to build 1 million homes every year but we are building just 200,000 units. The new government promised in the election campaign to build 5 million affordable homes. Many people think that it is impossible to build 5 million homes. This blog describes that Pakistani government can easily build 5 million homes.

Total money Pakistan needs to build 5 million homes

The construction cost of an affordable home of 2 bedrooms is USD 10,000 worldwide. This is because when houses are construction in large quantity then the construction cost is much lower. The government land is mostly used to build affordable homes. Let’s consider that average cost to build a home is USD 10,000. Here is the calculation of 5 million homes cost;

1 home = USD 10,000

5 homes = USD 50,000

50 homes = USD 0.5 million

50,000 homes = USD 0.5 billion

5,000,000 homes = USD 50 billion

How government can collect the money to build homes?

Bringing money from abroad

Approximately Pakistani $200 billions are parked in Swiss Banks. At the same time billions of dollars have been laundered illegally. Many Pakistani corrupt people have invested black money in foreign real estate and other businesses. The government should bring back this looted wealth of Pakistan. The money is enough to build dams, roads, hospitals, schools and affordable homes.

Collecting money by ruthless accountability

Pakistani shadow economy is greater than the real economy. According to the experts real economy is just 30% whereas the shadow economy is 70%. The government can grab the ill-gotten money firstly by issuing the new currency notes and secondly by asking the source of income. Wealth of the people should be confiscated who can’t explain the source of income.

Spending property tax to build homes

The provincial and federal governments collect billions from the real estate sector. Government can allocate property taxes to build the affordable homes. All provincial governments can start their own affordable housing schemes. The federal government can assist the provincial governments.

Direct foreign investment

Many foreign Pakistani tycoons and Western governments are willing to invest in Pakistan. They just need a business friendly atmosphere in Pakistan so that their capital is secure. Pakistani government can ask the foreign investors to invest in affordable housing sector. This way Pakistani government can easily achieve its target to build 5 million affordable homes in Pakistan.

Benefits of building 5 million affordable homes

Building affordable homes have many benefits;

Firstly affordable housing will reduce the homeless in Pakistan.

Secondly home ownership will increase in Pakistan.

Thirdly abnormal home prices in Pakistan will crash. The property price crash will make the homes affordable and middle class will be able to buy the homes in the open market.

Fourthly large scale construction of affordable housing will create many jobs. This is because construction sector is related to many other industries. So the construction of 5 millions home will uplift the economy of Pakistan.

Government should immediately start the affordable housing schemes

Affordable housing should be included in the infrastructure development policies. The government of Pakistan should immediately start the affordable housing schemes across Pakistan. Affordable housing can be allocated to people in the following categories;

In first category 25% affordable homes should be provided to the people who have no money to pay the rents and are homeless.

In second category 25% affordable homes should be allocated to the people who can pay some rents but are unable to rent homes in the open market.

In third category 25% affordable homes should be sold out to the people who can pay deposits and monthly installments. But homes should be sold out at very affordable rates as compared to the open market.

In fourth category 25% affordable homes should be allocated to people who can pay the lump sum amount. Once again homes should be sold out at low price as compared to the open market.

Naya Pakistan Housing Program How to Apply Registration Form


  1. plots prices increase hoo rahay hain karachi may. app bol rahay thay august say prices down hoo gay. karachi may jo plot 40 lakh ka august may mil raha tha ajj 45/48 lakh ka mil raha hia.

    • Kamran
      I have told many times that small properties worth less than 50 lac will perform good but property worth 50 lac or more will not find buyers. Its almost same what I said. Luxury expensive properties have lost market but the market of small properties worth less than 50 lac is strong.

  2. Darth.Kenobi

    on said  

    I have yet to see any decline in reality market or maybe I’m not watching it closely. Demand of houses is either same or a bit higher. Forexample in Bahria Phase & 8 Rawalpindi there is no change and no decline as well. Ruppee is loosing it’s value while we are waiting to purchase. But nothing fits our budget either. So where this all “market crash” is happening?
    I’m following Ghar47 for last 3 years and I was reading about this crash for last 24 months n haven’t seen anything. Malik Riaz also got clean chit by paying some fines and that’s the end of it.
    I’m sure market will either remain stagnant or will rise after few years and I don’t see any drop in residential houses or plots prices. Commercial property might drop but not everyone is a commercial property buyer here.

    What’s the future of Gulberg Residencia? No improvement in last 2 years … What about Top City? Is it a any good? New Islamabad Airport also didn’t revitalized that area so far.
    So many schemes are out there and so less are genuine buyers that nothing is changing for buyer and developer is also not spending a dime because he knows he won’t get any thing.

    • Darth.Kenobi
      Pakistan real estate market is in worst position.
      NAB/SC/FBR/Government have zero tolerance for corruption.
      In Pakistan abnormally high property prices were only due to the massive influx of black money into reality sector. Now things have changed. No investment can be seen in real estate sector. The big crisis is the non filers restrictions and non filers can’t buy property worth 50 lac and secondly source of income. Now everyone is questioned about the source of income so we can see record low property transactions.
      Property prices are already 20-25% down from peak of 2016. The next few months will clear the direction of reality sector.

  3. Farooq Lari

    on said  

    Sir gee,
    As per your previous saying through my various inquiries with you, price in Lake City Lahore (10 marla or others) should have stayed stagnant or reduced by now. You asked me to check buying and selling rates from different dealers to check the difference. The price quoted varied in between rs. 3-4 lacs (buying and selling). Now recently the prices have gone up by rs. 5 to 10 lacs in Lake City. What is the reason behind this as I am really down to hear this as I was waiting for Q4 2018 for a price crash etc. 🙁

    • Farooq Lari
      This is due to speculation not on real demand.
      Investment in property sector is drying due to 5 Million non filer property purchase ban.
      So don’t worry.
      A little more wait and you will see the real prices without speculations.
      Also keep in mind that 200 housing schemes are illegal in Lahore.
      Wait is better. It will pay in the end.

      • At the moment, property market is just about as active as a huge rock. In other words, hardly any buying-selling deals are taking place. Those that are occurring are mostly in the affordable or low value segment primarily where one does not have to be a tax filer.

        One of the reasons high value market has ground to a halt has to do with Risk and Reputation. And that’s not just for real estate deals. This phenomenon is affecting a lot of potential deals in other areas as well.

        Let me explain.

        The current environment is antithesis of what had been prevailing over last many years i.e. Corruption. It means people with black money had bid up the price of real estate to unrealistic levels; one ‘investor’ selling to another either to park money or to make a quick buck. The returns were dazzling and not available in any other legitimate business.

        All of that stopped. About a couple of years back.

        So what we have now are thousands of high value properties bought mostly with black money. But now that corruption is being tackled head on, the cycle of one investor selling to another cannot continue. The returns are simply not there and have also become very risky.

        What about parties with genuine, white money? Yes, they also exist. But there are two problems:

        1/ They are not as numerous as people with black money. So for every 100 high value properties, there might be 5 white money buyers available with that kind of resources.

        2/ Foremost consideration of parties with white money is to deal with other parties of similar clean reputation.

        It’s the second point that is really putting brakes on high value deals. Why? Because quite a few current high value property owners have shady reputation. Now parties with white money with good reputation simply do not wish to deal with them even when offered significant discounts. Parties with good reputation only wish to deal with others that are unblemished or do not have FIA, NAB after them that could confiscate properties obtained by sellers with black money. White money wishes to steer clear of potential court cases in future.

        Well, such candidates are very few amongst high value sellers …. due to the corruption-charged property buying-selling frenzy of the unscrupulous lot, that was witnessed specially since 2012-13.

        Net result: Market is stuck.

        High value properties will simply not sell. Even when their prices are down by 50%, reputable buyers would not risk their money in them. Not in the current environment.

        It will take a while for things to return to normal levels. What is normal?

        1/ When a significant number of corrupt lot is behind bars and their properties declared clean by relevant authorities, perhaps when being auctioned by government.

        2/ When prices have declined by at least 50-70% either nominally or via time value of money …. to reflect the true status of market as it should be without presence of black money.

        Ultimately, say in a few years economy will correct itself in a post corruption-purged environment as above to start behaving in a normal fashion again.

        Until then, whatever the dealers tell you …. try to take it with a pinch of salt. And enjoy the well-deserved & increasing panic of the ‘investor’ community.

        • Hasan
          Political situation is clear now
          Government policies are clear
          No tolerance for corruption by government, NAB, FBR, SC
          Luxury property in Pakistan was not for rich people but for the corrupt people. Expensive property was used to whiten the black money. This is why market is struct at the moment.
          Yes property worth less than 5 million rupees is strong as there are no filer / non filer issues.
          We all hear the news that bureaucracy is upset with the new government.
          Simply bureaucrats can’t live on HALAL pay which is not more than 1-2 lac. Can we uy expensive properties with such monthly pay. No we can’t.

          This is the normal trend as world is heading towards another recession by 2020.
          But price fall will be greater in Pakistan due to the involvement of BLACK MONEY.
          Its just the time otherwise property prices will just fall in Pakistan. Expected fall is 50%-70% from peak of 2016.

  4. Misbah Ul Haq Syed

    on said  

    Dear Malik Sahib,

    Do you think that property prices will improve considering the new government taking oath in a couple of days. I am focusing generally and also w.r.t. DHA City Karachi project.

    Also, what about Bahria Town, is it back on track? Do you think that DHA City Karachi will ever be able to compete the market prices with Bahria?

    Looking forward to hear your opinion from you.

    Kind regards,
    Misbah Ul Haq Syed

    • Misbah UL Haq Syed
      Pakistan reality sector has just entered in new phase. Two factors will shape the future.
      SC / NAB & FBR have started the accountability. The simple question that every citizen has to answer is the source of income. This has reduced the property prices as no one with black money can dare to invest in reality sector.
      The situation is similar to DUBAI. Due to new AMNESTY INTERNATIONAL LAWS Dubai has to return the money back to the country it belongs. DUBAI was the safe heaven for black money on parking the money laundered from different countries. But due to new laws property prices in DUBAI are just 25% of what they were in 2008.
      As new government has promised to build 5 million new homes it will further reduce the property prices. According to NAB there are 1000’s of illegal housing schemes in Pakistan. People will never buy the expensive properties in illegal societies if they have access to affordable government homes.
      Both societies have witnessed slowdown. The chances are that prices will never recover to old level in the near future.
      DHA is better investment as compared to Bahria Town.

  5. I have to correct you here…..the incoming Pakistani government has not promised to build 5 million homes nor are they able to do it. They said they will create the environment and give incentives so that private builders and foreign investors can build 5 million homes in the next 5 years. I would suggest you go over their speeches including the manifesto of the government.

    • Andil
      Wait and see things will get clear in few weeks.
      Even if government allows investors to build affordable homes it will provide the relief for public who are forced to buy expensive properties in illegal housing schemes.
      Relief is there one way on other.

  6. Over the years, developers in Karachi’s Clifton, Bathisland, Civil Lines, etc have been building residential towers at a frenzied pace flouting quite a few building regulations in the process, all for the upper end of the market 80% of which relied heavily on black money.

    Such units were typically of 2000 square feet or above priced at about Rs.9000 – 15000 per square feet. And now that those buyers have all but disappeared, the developers are left with a lot of unsold inventory that cannot be flipped for a quick buck or to park shady money.

    All this time the need was to build units in the affordable segment. In the case of Karachi, affordable would have meant residential units of say, 800 – 1000 square feet with a per square feet cost of around Rs.2500 –5000 / sq ft. The vast majority of white collar potential buyers could afford an apartment in the range of Rs.20 – 50 lacs. Those would have comprised of small 2 bedroom apartments, a kitchen, a central living room, and a drawing room if possible.

    Hence, demand lay at one end of spectrum while supply was at the opposite end resulting in a huge mismatch. It was primarily due to greed of developers and of their pals in officialdom who are now caught with their investments in deep freeze with no easy exit unless by assuming razor sharp losses.

    By a rough estimate there would be about 2000 recently completed (within last 3-4 years) high value apartments only in Clifton, Bathisland, and Civil Lines. A casual observation tells us that 80-90% of these apartments are still vacant and likely to remain so for several years into the future creating a virtual mini city of ghost towers. At the same time, supply hasn’t totally stopped since these projects operate in accordance with a certain momentum. In other words, developers keep building high value ghost towers (albeit at a much slower pace) well after demand has died out.

    While this story is common to many major cities of the world, whether developed or developing, the difference in case of Pakistan is the force of the crusade against black money. Quite frankly, it has taken the investor community by surprise. As recently as middle of 2017 they were of the opinion that nothing would ever change (for the better) in this country and it’ll be business as usual.

    They were wrong.

    In fact, if one looks around towards the Arab Spring countries and to our immediate neighborhood, our country has been a miracle of God in the way we are progressing. No bloody revolution, no military takeovers, and most importantly a paradigm shift of the nation to strive for a corruption free country. Of course there are economic and social hurdles (e.g. corruption became an acceptable way of life) that are a sad legacy of last 30-35 years but they are not insurmountable & we are on our way.

    One way or another, affordable homes for the masses shall be built and their quality of life shall improve. The Pakistan of just a few years from now would be very positively different from what it has been all these years. The early signs are there. All thanks to the Lord Who is helping to steer us in the right direction.

    • Hasan
      Thanks for the detailed analysis. The situation is same across Pakistan. HIGH-END LUXURY Market is unable to attract the buyers with white money. Builders / Developers have sustained huge losses as the unsold stock is high. I would like to add few words.
      Firstly, Pakistan is moving in the right direction as now corruption is not the mark of success. The ruthless accountability is upon us and everyone has to answer about the source of income. Now no one can misuse the power. Now people believe that corrupt mafia will be in jail whereas earlier they only trusted the power of money. Pakistani institution are strong now and no one can dare to challenge the power of STATE.

      Highly unaffordable in the world. According to NUMBEO the affordable house price to income ratio is 1:5 but its 1:14 in Pakistan.
      the un affordable property market in Pakistan was only due to the huge influx of black money. Secondly there was no provision of affordable housing in Pakistan.

      The new government will soon start the construction of affordable homes across Pakistan for the lower middle class people. This will greatly impact the housing market.
      1- Due to crackdown on black money no one can dare to buy property with illegal money.
      2- Why people buy expensive homes in illegal housing schemes when there are affordable homes by government.

      AFFORDABLE housing will stabilize the real estate market.
      Homelessness will decrease
      Whereas home ownership will increase.

  7. Ali kamran

    on said  

    Sir thanks for sharing this news.
    My friends recommended me GHAR47 as the reliable source of information.
    We are working class and desperate to live in our own homes. Totally fed up by paying monthly rents.
    Building affordable homes will benefit the masses.
    Hope government start building 5M low cost homes in 100 days.

    • Ali Kamran
      Home ownership is declining in Pakistan due to highly un affordable prices.
      The construction of 5 M Low-cost homes will help in reducing the homelessness in Pakistan.
      Yes, there are news that the government will start the construction of 5 Million housing units in the first 100 days.

  8. Saba majeed

    on said  

    Dear sir
    Kia ham aam admi ko ghar mile ga.
    what will be the impact of affordable housing of government on property market

    • Saba Majeed
      Yes these 5/M LOW-COST HOMES are for people who are not home owners and are living on rents.
      The construction of 5 MILLION homes will start the job creation as many construction related industries will get the orders and boost.
      Why someone buy expensive homes when there are affordable homes?
      So the construction of 5 M homes will crash the high property prices.

  9. Hasan

    on said  

    This is a somewhat off topic from this article, still I am posting it with your indulgence.

    From discussions with various players in high value property market e.g. Karachi’s DHA Phases 5 & 6, the following picture emerges:

    1000 square yards brand new house with quality fittings = Asking Price Rs.25-30 crores

    How do people who are mildly interested as buyers feel about it?

    1000 square yards brand new house with quality fittings = Probable offer price Rs. 18 – 19 crores

    At such a steep discount, sellers would not even break even. And the slide hasn’t stopped yet. This is just the picture as it currently appears.

    Similarly, for used houses:

    1000 square yards 10-12 years old house, reasonably well constructed = Asking price Rs.15-16 crores

    How do potential buyers feel about it?

    1000 square yards 10-12 years old house, reasonably well constructed = Probable offer price Rs.11-12 crores.

    Both sets of brand new or used houses, even at deep discounts mentioned, are not selling.

    Hence, this is what a crash looks like.

    It’s because white money of (most) filers is sitting at levels which is yet another 20 – 50% down depending on type & location of house from what (some) potential buyers feel about it at the moment.

    At this rate, deals would not happen unless prices fall further to levels that were prevalent in 2010-12, whether in absolute nominal terms or by virtue of time value of money. Most likely it’ll be a combination of these two types of discounts.

    • Hasan
      Many thanks for great insight and sharing the on ground situation.
      There are few common questions about PAKISTAN REAL ESTATE nowadays;
      Property prices in Pakistan are not falling due to higher taxes or 5 million buying restriction
      Real estate sector is always used to whiten the black money. So when SC / NAB / FBR is chasing the black money so no one can dare to buy property with ill gotten money.
      Dubai is famous for black money heaven. Due to new laws by AMNESTY INTERNATIONAL, no one can buy property in DUBAI with black money. So we can see the price trends. Prices are just 25% of what they were back in 2008.
      PAKISTAN PROPERTY PRICES ARE FALLING LIKE DUBAI to adjust the new buying power
      Abnormal property prices in Pakistan were only due to black money influx. As now no one is buying property with black money due to the fear of NAB so prices are falling. Sellers are reducing the prices but no sale yet.
      Honest tax payers have low purchasing power this is why property prices are constantly falling.
      PAKISTAN WILL OBSERVE MASSIVE PRICE FALL and then a long stagnation.
      Property prices are going back to the level of 2012 from where they started increasing abnormally.

      Look at level of money laundering / corruption.
      SC / NAB is bent hard to collect the ill gotten money in Pakistan and abroad;


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