There is a shortage of around 8 million houses in Pakistan that is further growing with the ratio of 600,000 annually.
The central bank report indicated that the formal financial sector deals with only 1 to 2 percent of all housing transactions in the country whereas informal lending caters to up to 10 percent of residential housing transactions.
Housing is the major component of social infrastructure and the lack in this sector imposes negative effects on the economic development. The real estate experts also mentioned that housing sector is believed to affect economy in a number of ways. For instance, if majority of the population has access to adequate housing, they can participate economically, socially and politically more actively in their communities.
A real estate expert suggested that the government should regulate the process and must facilitate the private sector for the provision of subsidized homes. He further recommended that government must keep a strict control on prices of building materials. The government should provide subsidized building material so that housing construction is completed timely.
Rapid urbanisation should not be taken negatively because it indicates economic development. Living standards are changing in the cities that force developers to add value to the communities. Buyers want everything including security, community centres, hospitals, cinemas, parks and even golf clubs within the vicinity.
The expert said that the State Bank of Pakistan must launch First Home Mortgage Scheme on marginal interest for all income groups to fill the void between supply and demand. If the housing sector grows, the allied sectors like construction material, including cement, steel and a long chain of several other industries will also get a boost that will eventually increase the GDP of Pakistan. Therefore, central bank must give special attention to the housing sector as it is related to the economic development of the country.