![\"Housing](\"https:\/\/www.zameen.com\/blog\/wp-content\/uploads\/2019\/11\/01-1024x640.jpg\")
Source: Enhancing Builder Finance in Pakistan, Karandaaz Pakistan <\/figcaption><\/figure>\n\n\n\n
Moreover, according to the State Bank of Pakistan, the urban housing demand is going up by 350,000 units every year, of which the demand is met for only 150,000 units. Of this, more than 60 percent of the housing demand is coming from the low-income groups, while the supply is predominantly in the middle to upper middle-income groups. Therefore, there is an even greater mismatch in the provision of low-income housing.<\/p>\n\n\n\n
Additionally, with a rising younger population, and\nhigher internal rural to urban migrants searching for jobs in big cities, many\nhave no choice but to choose informal means of living. Therefore, unsurprisingly,\nabout 47 percent of the current urban population lives in informal settlements,\nwhich are in the form of katchi abadis<\/em> mostly built on parcels of\ngovernment occupied land. <\/p>\n\n\n\n These squatter settlements also do not have access to\ninfrastructure and basic public goods such as water, gas and electricity. All\nthis is further exacerbated by the fact that low-income households require\nlarger units to accommodate, but are usually in very small sizes. <\/p>\n\n\n\n However, optimistically speaking, the housing shortage\ncan also be looked at through the lens of opportunity. According to a 2014\nMckinsey study, the global gap of 440 million housing units represents an\nopportunity for the private sector. The investment required to meet this gap is\n$9 to $11 trillion for construction, and up to $16 trillion if one includes\nland cost. At this rate, Pakistan\u2019s current shortage would need an investment\nof $250 billion, higher than the estimates of $180-200 billion suggested by\nlocal developers. <\/p>\n\n\n\n The demand-supply equation of housing is a tough one to balance. It is clear that while the government must actively provide solutions, in terms of infrastructure and urban planning, massive land reforms, policy instruments and incentives for mixed use developments, as well as removing regulatory barriers; it is the private sector\u2014builders, developers, construction solution providers, banks, leasing and financing companies\u2014that will have to mobilize their resources. The success of the Naya Pakistan Housing Plan could create an impetus for this. More on that in this space later.<\/p>\n\n\n\n![\"Rate](\"https:\/\/www.zameen.com\/blog\/wp-content\/uploads\/2019\/11\/02-1024x640.jpg\")
Data source: World Bank <\/figcaption><\/figure>\n\n\n\n