Affordable housing remains a significant challenge for low-income groups in urban areas. Experts
Monday, January 6, 2025
ISLAMABAD (UrduPoint News International/ Sputnik - 06 January 2025) Experts have stressed that sustainable financing mechanisms are crucial to address Pakistan’s housing deficit, especially in urban areas. Affordable housing remains a major challenge for low-income groups, requiring innovative solutions such as public-private partnerships and improved banking incentives to ensure accessibility and sustainability.
Speaking to Wealth Pak, Dr. Imran Qureshi, an economist at the Sustainable Development Policy Institute, highlighted the urgent need to address population growth. With a population of over 240 million, Pakistan is facing immense pressure due to its already limited resources. The most immediate impact is felt in urban centers where the demand for housing and infrastructure far exceeds the supply, leading to the proliferation of informal settlements and increased homelessness, especially in metropolitan areas like Karachi and Lahore.
He said that public-private sector partnerships, efficiency and capital, as well as leveraging public land and resources, can help bridge this gap. Governments can encourage private developers by offering subsidies, tax breaks, or land price reductions that can make it possible to build low-cost housing. He noted that many low- and middle-income individuals and families struggle to obtain affordable loans to buy or build their homes. The stringent requirements and high interest rates imposed by financial institutions often deprive a large segment of the population of access to housing finance.
He said that banks should simplify the mortgage process, reduce interest rates, and introduce long-term repayment plans tailored to low- and middle-income households. He cited examples from India and Bangladesh, where targeted housing finance reforms have successfully increased homeownership rates among the economically weaker sections.
He said that collaboration among stakeholders is essential to make affordable housing a reality in Pakistan. He urged policymakers to create an enabling environment through regulatory reforms, fiscal incentives and public-private partnerships. Without a sustainable financing framework, Pakistan’s housing deficit will continue to grow and exacerbate urban inequality and social challenges. Meanwhile, an official of the Naya Pakistan Housing and Development Authority said that the authority aims to collaborate with development agencies and authorities to provide affordable housing across Pakistan. Steps will be taken to limit housing prices for low and middle income groups to ensure utilization.
He said that the development authorities would be responsible for the development and construction of land, which would be financed by banks, while the institution would offer a cost subsidy of Rs 300,000 to eligible applicants registered through the Naya Pakistan Housing Program. Furthermore, he said that it would coordinate with various government agencies to facilitate the construction of road, water and sanitation infrastructure in the project sites and arrange for end-buyers and mortgage facilities for low-income groups. The approved projects would also benefit from a 90 percent tax exemption, which would further encourage the development of affordable housing.
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