Determinants of Affordable Housing in Urban Areas of Pakistan: Supply and Demand Side Perspectives
Author: Muhammad Yasir

Urban population of Pakistan is growing with the pace of 2.7 percent while national growth rate is 2.4 percent according to provisional census results of 2017. Housing is a challenge for urban residents due to higher population growth. Housing demand and supply play significant role to live in the urban areas and shortage of housing is increasing. The objective of the study is to determine affordability of household and determine supply and demand side perspectives with the context of Pakistani cities. This cross-sectional study has used mixed method by conducting quantitative analysis and qualitative analysis technique by using household survey and key informant’s interviews from Rawalpindi and Bara Kahu. There are 200 respondents in questionnaire based face to face interviews and 15 key informant’s in-depth interviews are part of the study. According to study, there are 60 percent households are residing in rented house and rest of households are living their own house while mean income of sample population is 27110 rupees, average rent is 10785 rupees, 2.39 rooms with 4.2 Marla size dwelling unit. All residents are availing electricity, gas connection and water connection services but 60 percent households having drinkable water service in their housing unit in which 52 percent from Bara Kahu and 68 percent from Dhok Kala Khan residents have drinkable water. There are 62 percent households having waste management system in Bara Kahu while all residents of Dhok Kala Khan are enjoying waste management service by local government. There are 29.5 percent households are living in affordable housing according to rent to income ratio criteria (<30%) and 38 percent living in affordable housing according to rent including transport to income criteria (<45%). The average income of affordable housing unit is 36491 and unaffordable housing unit is 23184 rupees that shows lower income group has caught in unaffordability net. According to hedonic regression model, increase in one unit of dwelling size increased 22 percent and if house is not owned by household increased 20 percent rent to income ratio and both determine unaffordability in demand side analysis while these two determinants also increase 13 percent and 18 percent rent including transport to income ratio but not significant in the model. According to supply side perspectives, finance is one of leading constraint and second one is availability of land indicated to households survey by respondents in the study. Government has 9 allocated 1 percent of GDP for housing finance in the budget while small income group cannot access to finance due to their unstable source of income and conditions by financial institutions. Higher prices of available land and higher construction cost (1100 rupees per square feet) also create housing gap in the respective areas of the study. Overall, mostly people lives in unaffordable house due to low income and higher rents and they also can not access to finance due to conditions of financial institutions those are regressive in nature that is why housing gap is increasing. In this situation, government can interfere and can provide cheap housing for small income group with all utilities including drinkable water as government to providing to public servants Supervisor:- Dr Zahid Asghar

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Keywords : Affordable Housing, Housing Policy, Housing Policy- Pakistan, Urban Development
Supervisor: Zahid Asghar

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