From underutilised homes in elite enclaves to overcrowded single-room dwellings in poor localities, and from middle-class areas choked by failing services to rampant commercialisation and speculation across rural and urban residential zones, the mismatch and spatial segregation in Pakistan’s housing landscape is stark.

The disparities are too visible and too consequential for the majority to ignore. Yet, meaningful, pro-people interventions to narrow the widening demand-supply gap or to arrest the steep decline in housing affordability remain almost nonexistent.

Pakistan remains absent from most cited global housing indices (Housing Right Index, Adequate Housing Index, Global Housing Indicators), a gap widely attributed to the absence of systematic data and the extreme variations in housing conditions across cities and regions, which make comparability difficult. Experts consider the commonly cited housing deficit of 12 million housing units to be a significant understatement. Some online sources, citing World Bank estimates, suggest that Pakistan’s housing affordability index has slipped to 0.4 in 2025 from 0.5 earlier, far below Bangladesh (0.7) and India (0.8).

When approached, Chief Statistician Dr Naeem uz Zafar rejected the notion that Pakistan lacks adequate housing data. “The 7th Population and Housing Census, conducted digitally in 2023, provides comprehensive housing information,” he said. “From the number of rooms and housing type to construction materials, persons per room, and water and sanitation facilities, all variables are available and publicly accessible on the Pakistan Bureau of Statistics website. The dataset is robust enough to compute any housing index required.”

Key census findings show Pakistan’s population at 241.5m, living in 38.34m households. Of these, 26m or 67.5 per cent, reside in structurally sound, regular housing units. Around 8m units (20pc) are classified as ‘kacha’ (mud structures), while 5m (12.6pc) fall into the semi-pakka category. The average household size stands at 6.33 persons.

About 84.3pc of homes rely on the national electricity grid, while 2.9pc use solar power. Access to natural gas reflects a stark rural-urban divide: 89pc of urban household are connected, compared to 48pc in rural areas.

An end to abrupt tax changes, minimal government intrusion, and strong, predictable polices could reverse declining investor confidence real estate

There is a clear need for housing specialists, urban planners and data analysts to systematically process and interpret the extensive metadata now available. Proper analysis would yield far deeper insight into Pakistan’s housing realities, enabling the government to develop evidence-based policy and empowering citizens to make informed decisions as they navigate an increasingly challenging housing landscape.

“Housing comfort has become a luxury few can afford. Even with multiple jobs, securing a stable home for one’s family is a major challenge,” said Nadir, a 40-year-old engineer earning Rs150,000 a month. “For most young professionals, home ownership is now a distant dream. We spend a huge share of our income on rent, often for places without even basic amenities like water.”

There is an urgent need to address the stark disparities in Pakistan’s housing sector, which are steadily feeding public discontent. In many elite localities, large homes are occupied by ageing parents, often with more domestic staff than family members, while their children live abroad.

Meanwhile, in low-income areas, a three-storey building on a 120 square yard plot may house nearly 100 people, with each of the nine rooms rented to 7-member families. Although Pakistan’s average density is reported at 3.3 persons per room, such extreme variations mean official averages fail to capture the harsh reality of living conditions.

Unfortunately, most public housing schemes in Pakistan have been either too small in scale or too poorly designed to make any meaningful difference. The reality remains unchanged: a majority of Pakistanis are denied access to basic, safe and affordable housing.

Pakistan’s dire housing conditions underscore the failure of the Federal Housing Policy 2001. The government is now drafting another framework, and the proposed Housing Policy 2025 has been uploaded on the Federal Ministry of Housing and Works website. Yet it has neither inspired stakeholders nor sparked meaningful public debate on how to address the country’s growing housing needs. Official claims of ‘broad consultation’ have been disputed, with many stakeholders insisting they were never approached or engaged in the process.

Queries were sent to the government’s economic team and to officials in the Federal Ministry of Housing and Works, but no response was received by the time this report was filed. Dr Asghar Nadeem, a senior officer, shared an updated version of the draft policy but did not address the specific questions raised.

Many experts and some private sector representatives sought time to review the draft policy before commenting. Shaban Elahi, President of the Pakistan Real Estate Forum, however, was unimpressed. “The policy reads like a copy-paste exercise, disconnected from our realities. We need ground-up, local solutions,” he said.

He argued that the sector’s core problem is collapsing investor confidence, driven by unpredictable taxes, Federal Board of Revenue (FBR) harassment, currency instability, weak buyer protection, no-objection certificate hurdles and the absence of a consistent real-estate framework.

Mr Elahi urged the government to prioritise basic urban infrastructure — roads, water, sewerage, electricity — and develop mass transit through public-private partnerships. With stable infrastructure and predictable rules, he said, private developers would invest at scale.

He proposed a five-year real-estate policy with no abrupt tax changes, minimal FBR involvement, guaranteed NOCs, fast dispute resolution and strong contract enforcement. Targeted incentives, reduced taxes, duty-free construction materials, and a regime for verified developers could unlock large-scale private investment in affordable housing.

Pointing to India, Vietnam, Indonesia, Turkey and Malaysia, where predictable regulation enabled private developers to deliver thousands of affordable units, Mr Elahi urged, “If they could transform housing deficits, Pakistan can too — provided the rules stop shifting.”

Published in Dawn, The Business and Finance Weekly, November 24th, 2025