March 4, 2025
ISLAMABAD – Owning a home has long been considered a financial milestone, but for an average Pakistani, this goal is becoming increasingly unattainable. Property prices have surged beyond affordability, while stagnant wages and rising inflation make it harder for middle-income households to save enough for a down payment. As real estate continues to be a critical factor in economic stability, its increasing inaccessibility raises concerns about long-term financial security and living conditions for millions of people.
The cost of renting and daily survival
With homeownership slipping away, many Pakistanis turn to renting. However, rental costs are rising, making this an unsustainable alternative. According to the Gallup Pakistan Big Data Analysis of the 7th Pakistan Population and Housing Census 2023, around seven million households, or 13.6 per cent of the total, live in rented properties. Urban centres are particularly affected.
Islamabad has the highest proportion of urban rented homes at 35.6pc, followed by Sindh at 29.1pc, Khyber Pakhtunkhwa at 27.5pc, Punjab at 23.1pc, and Balochistan at 18.3pc. Karachi’s rental market is expanding due to population growth, with areas like Aram Bagh seeing 42.5pc of households in rental properties.
Housing costs in Karachi have risen due to rapid urbanisation, with the average house price at approximately Rs47 million. Prices can go up to Rs19,500 per square foot in some areas. Rental rates also vary based on location. A 500-square-yard upper portion in DHA Phases I and II rents for Rs80,000-100,000, while in Phases V, VI, and VII, it ranges from Rs100,000-120,000. Commercial building rentals are priced at Rs113 per square foot. The increasing demand for housing and commercial space continues to shape Karachi’s real estate market.
Comparisons with global markets highlight the issue further. In India, 30pc of the population lives in rental housing, while in the US, 36pc of households are renters. The trend is similar in the UK, where 35pc of households belong to the rental sector. These figures indicate that renting is more common in other countries, but in Pakistan, it remains an unsustainable solution due to rising rental costs and stagnant wages. As rent continues to consume a lion’s portion of household incomes, financial stability remains out of reach for many.
Real estate plays a major role in everyday economic survival. Housing expenses take up a substantial portion of a household’s budget, leaving little room for savings, investments, or other essential expenses. The increasing cost of living — driven by inflation, utility bills, and everyday expenses — has made it harder for families from the middle-income group to sustain themselves.
For many, homeownership was a way to build long-term financial security, but with property prices soaring and financing options limited, this is no longer an option.
The rising cost of real estate also affects businesses, with higher rental costs leading to increased operational expenses. Commercial spaces in major cities are becoming unaffordable for small businesses, further restricting economic growth. The real estate market’s inaccessibility is not just a housing issue; it affects employment, entrepreneurship, and economic mobility.
Generational divide in homeownership
Buying a first home is now significantly harder for younger generations than it was for their parents. Previous generations benefitted from lower property prices, stable employment, and family structures that allowed them to pool resources for home purchases. Today, property prices have far outpaced income growth, making it difficult for younger individuals to enter the market. In urban centres, the situation is even worse, with land scarcity and high demand driving up prices further.
The challenge is compounded by changing financial realities. Older generations often acquired property at a time when real estate was more affordable, and financing options were more accessible. Today, mortgage lending remains limited and high interest rates make it difficult for the middle-income group to afford long-term loans. Additionally, the shift toward nuclear families has reduced the pooling of resources, leaving younger generations with fewer financial options for homeownership.
Without intervention, housing will continue to be a financial burden for future generations. Policymakers need to address the affordability crisis by promoting low-cost housing projects, improving mortgage accessibility, and regulating rental markets to prevent excessive rent hikes.
If left unaddressed, the housing crisis will deepen economic disparities, making financial stability unattainable for a growing number of Pakistanis.
For an average Pakistani, securing stable housing — whether through renting or homeownership — is no longer a simple decision but a financial challenge with long-term consequences. As housing remains a key factor in economic well-being, its rising inaccessibility signals a larger economic issue that requires urgent attention.
The writer is the head of content at a communications agency.