Pakistan with a population of over 170 million, has the highest birth rate in the South Asian region, and is currently the 6th most populous country in the world. With this rapid population growth, the country is facing a serious housing deficit, which has already reached 7.5 million units and is expected to increase unless something is done about it.
This housing shortage has become further compounded by continuous and large-scale migration of the rural population to the cities, in search of livelihood and better opportunities. The urban areas are thus in a crisis-like situation, especially for low- and middle-income groups, leading to a steady spread of slums and 'katchi-abadis', with people of limited resources forced to live several individuals to each room.
There are a number of factors responsible for this burgeoning housing issue, including a significant gap between the housing cost and affordability, lack of housing finance products responding to the need of the people, wrong usage of plots essentially meant for low-income groups, absence of self-help and cumbersome procedures of obtaining loans which lead to corruption.
In a country like Pakistan where the per capita income is quite low at around $1051 per year, or about Rs 7,500 per month, the housing need for most people is met by living in large joint families in either owned/inherited houses or houses and flats acquired on rent. With limited resources, having a decent house remains a dream for the low- and middle-income groups. As the size of family keeps growing, the standard of living goes down, with more and more family members sharing the same limited space. There is an obvious need for a larger and better home, but affordability remains the main hurdle.
Those who have their own property are slightly better off, as they can at least consider making extensions and improvements in their property. As the family grows in size, for example, due to the marriage of a son, another room is constructed to accommodate the newly-weds. Then, an additional room or rooms are often required as children grow up and need more space and privacy. Even an additional bathroom becomes a pressing need.
But there are still a large number of people who cannot even afford to extend their owned houses for lack of finances. All they may have to live in is one or two rooms and one bathroom for a family of five or more persons. This is where housing finance for the home extension, as opposed to building a new house altogether, can play a vital role in alleviating the overall housing shortage. If the people are able to extend their homes with new bedrooms or a study, additional bathrooms or even an expanded kitchen, and are able to continue living as a joint-family but in greater comfort, then at least these people are no longer in the market for new housing, reducing the overall housing shortage. This is really an invaluable insight that city planners can use effectively.
It was perhaps this very foresight that has prompted the country's leading housing finance institution, the House Building Finance Corporation, to proactively respond to the market situation and work on developing a new loan scheme or product specifically for home renovation or extension. This product will be of immense benefit especially for low- and middle-income families, who can easily pledge as the collateral the property itself which they wish to extend.
Such innovative housing loans for renovation and extension, when given on attractive terms can be taken up by a great number of people, whether living in big cities or in smaller towns, or even in rural areas. They provide a quick solution to a nagging problem, the mitigation of which has benefits even beyond giving a larger living space. For there can be little doubt that better housing will lead to a happier family and by extension, to greater harmony in our society.
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