Accelerating Growth of Affordable Housing in Pakistan

• The World Population today is 7.12 billion, and by 2050 it will be 8.92 billion-plus.
• Almost half of the world lives on less than $ 2.50 a day, and four out of five under $10 a day
• Worldwide, some 830 million people live in urban slums, and by 2020, it is estimated that the world slum population will cross 1 billion.
• Every second person (50%) on the globe lives in urban areas. This is expected to reach 75% (which is 3 out of 4 persons) by 2050.
• Slum dwellers grew from 777 million to 830 million during 2000-2010.
• By 2030, around 40% of the world population, i.e., 3 billion-plus, will require basic urban infrastructure and housing. (In 2014, China had 758 million urban dwellers, India 410 million, USA 263 million.)
• The world needs 4,000 houses an hour to keep up with the demand (UN-Habitat) In view of this population and urbanization explosion:
➢ The percentage of people without access to decent, stable housing is rising.
➢ Adequate housing is vital to the health of the world’s economies, communities and populations.
➢ If we are to succeed in the fight against poverty, we must support the expansion of housing both as policy as well as practice.

• Asia-Pacific represents:
• 1/4th of the world’s population, including China, nearly half of the world population resides in this region.
• Nearly ½ of the world’s poor live here.
• The region is faced with a massive housing shortage. Nearly the entire urban shortage is in the low-income category
• Awareness: Housing has become a popular political slogan.
• “Housing for all”
• “Slum Free Cities”
• “Maang Raha hai har Insaan – Roti, Kapra, aur Makan” (Every human demands food, clothing and shelter), etc.
• Delivery: In a few countries there is SOME, but in most others, there is NONE Each country in the region has its own geo-socioeconomic parameters, while all face a common issue of “shelter less poor”.

• IDB/IRTI* study suggests housing needs of the Muslim World are about 8.2 mn units, nearly all in the Low-Income Segment. The estimate needs further analysis.
The breakdown is as follows:
– MENA 3.2 mn;
– Asia 2.7 mn; and
– Africa/others 2.3 mn.
• Shortage: Egypt 1.5 mn, Iraq 1.0 mn, Morocco 0.6 mn, Saudi Arabia 0.4 mn
• Significant oversupply in upscale or luxury housing only, while low-income segments/ communities remain neglected
• Rapid urbanization is a major issue for low-income housing
• Need for new housing for 8 mn plus due to population growth is based on 5-5.5/HH and a population growth rate of 2.8%
• Urbanization and population growth further increase the annual housing needs in major metropolitans
• On the other side, supply is 30-40% of new demand, all for the high-income segment.

• IDB member Countries need around 8.2 mn new housing units/year. To meet this yearly demand they will need US$ 15.5 Bn/year of investment in the housing sector.*
• The yearly requirement of housing in the Muslim World is growing at 2.83% p.a.
• Sharia-compliant housing Finance in Muslin Countries is around 20% only.
• Muslim Population Share: Africa-53.0 %, Asia-32. 2%, Europe-7.6 %, N. America-1.8 %**
• Urban population of IDB member countries is growing at 2.8%/year (Worldwide growth 0.5%).
• The total urban population of IDB Member Countries was 731 Mn in 2010, representing nearly half of the total population of IDB member countries
• MD to GDP Ratio is highest in Malaysia (32%), and lowest in Pakistan and Egypt (below 1%).
• Institutionalized housing finance is at the infancy stage in most of these countries

Market Housing:
• Represents High and Middle-Income Market Segments
• Market Segment is addressed by the market forces on its own without any need for state-intervention or support
• Supply is there to meet the demand

Social Housing:
• Represents lower-middle and low-income market
• Social segment needs state intervention/support to facilitate affordable housing supply and an enabling environment –LIH Segment
• Bottom of the Pyramid: The candidates for housing microfinance, need delivery through direct/indirect state subsidies. This is the Economically Weaker Segment (EWS)