News / Articles

Check out market updates

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 the 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 the people who can pay the lump sum amount. Once again homes should be sold out at low price as compared to the open market.

Homelessness in Pakistan


  1. Andil

    on   said 

    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.

  2. Hasan

    on   said 

    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.

  3. 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.

  4. 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.

  5. 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;


Leave a Reply

Your email address will not be published. Required fields are marked *