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affordable housing in pakistan

Written by Muhammad Aslam Khan 8:00 pm Articles, Pakistan, Published Content

Affordable and Safe Housing in Pakistan: Addressing Inflated Prices & Misleading Advertisements

Muhammad Aslam Khan highlights the unethical and misleading advertising practices employed by many housing societies in Pakistan. He notes that they focus solely on investment potential and profitability, while ignoring basic safety features and building codes. He stresses the need for the government to enact laws to regulate the real estate market. To provide safe and affordable housing options to people, there is a dire need for solid investment in the housing sector.
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About the Author(s)
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Mr Muhammad Aslam Khan holds a Master's degree in science. He works as a junior manager in the private sector.

Introduction

Several housing societies are currently heavily advertising on various platforms such as newspapers, social media, and television, tempting people to “invest” in their housing projects. However, instead of showing affordable housing in Pakistan and the availability of basic necessities, some of these societies are misleading people by showcasing foreign infrastructure and misrepresenting facts such as distances from the nearest motorway or airport.

Although these strategies may be tempting, it is important to understand that investing in the real estate market in this way contributes to an inflation bubble, which can have serious consequences for future generations. The inflated prices will eventually have to be paid by our children and grandchildren, making it difficult for them to have access to affordable housing and secure a decent standard of living in Pakistan.

house prices in pakistan

In the past, the bursting of such inflated economies in developed countries has led to devastating consequences, and it is crucial that we learn from these mistakes and avoid repeating them in the future.

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Beyond Profit

Housing and real estate should primarily be treated as a basic human need, rather than a commodity to be traded and speculated on for profit. Everyone needs a safe, decent, and affordable place to live, and access to housing is a fundamental human right. When housing and real estate are treated primarily as commodities, it can lead to a variety of negative outcomes.

Speculation and price inflation can lead to housing becoming unaffordable for many people, particularly those with lower incomes, and can contribute to homelessness and housing insecurity. It can also lead to a concentration of wealth among a small group of investors and property owners, exacerbating economic inequality.

That being said, the real estate market does play an important role in the economy, as it provides opportunities for people to invest in property and generate wealth. However, it is important that the pursuit of profit does not come at the expense of access to affordable housing for everyone.

Hyper-inflation in the Real Estate Market

A market bubble refers to a situation in which the price of an asset, such as stocks, real estate, or cryptocurrencies, becomes over-inflated due to speculation, hype, or other irrational factors. In a bubble, investors may bid up the price of an asset beyond its intrinsic value, leading to a situation where the price is unsustainable and disconnected from the underlying fundamentals.

Inflation of assets

Bubbles are often characterized by a period of rapid price increases, fueled by a frenzy of buying and speculation, followed by a sudden and sharp drop in prices when the bubble eventually bursts. This can cause significant losses for investors who bought into the bubble at its peak.

There have been several instances of real estate market bubbles throughout history, which have led to significant price inflation and subsequent crashes. One notable example is the United States’ housing bubble which peaked in 2006 and led to the 2008 financial crisis. During this period, the price of real estate in many parts of the country was driven up by a combination of factors, including low-interest rates, lax lending standards, and a speculative frenzy. As a result, many people bought homes they could not afford, and many mortgage lenders issued loans that were risky and often fraudulent.

housing problem in the US

When the bubble eventually burst, home prices plummeted, and many homeowners found themselves underwater, owing more on their mortgages than their homes were worth. This led to a wave of foreclosures and a banking crisis that reverberated throughout the global economy. Other examples of real estate bubbles include the Japanese property bubble of the 1980s, which also led to a banking crisis, and the Spanish property bubble which peaked in the mid-2000s and contributed to the country’s economic downturn.

It is worth noting that while real estate bubbles can have devastating consequences, not all price increases in the real estate market are due to bubbles. Some increases may be driven by genuine demand, such as population growth or low housing supply, and may not necessarily lead to a crash.

Building Codes and Fire Safety Neglected in Housing Project Advertisements

In many housing society advertisements, the focus is solely on the investment and profit potential, with little or no mention of the safety features of the houses or whether building codes are being followed. This is concerning, especially in a country like Pakistan, where many buildings have been declared unsafe by authorities due to violations of building codes, and there have been several accidents as a result of poor building design and a lack of fire safety measures.

It is essential that the safety of the residents is given equal importance to the profitability of the project. Developers must follow building codes and regulations to ensure that their structures are safe and secure for residents. Building codes exist for a reason, and they are in place to protect the lives and property of the people who occupy these buildings.

Moreover, it is vital that developers take the necessary steps to ensure that their buildings are designed with fire safety in mind. The absence of proper fire safety measures can lead to devastating consequences in case of a fire, as was witnessed in several incidents in Pakistan in recent years.

Therefore, it is the responsibility of the developers to prioritize the safety and security of their projects and not just focus on the profit potential. Prospective buyers should also be aware of the importance of safety features and building codes and inquire about them before investing in any housing project.

Role of the Government & Policymakers

The government plays a crucial role in ensuring that access to housing is not a luxury but a basic human right. To address the current housing crisis in Pakistan, the government should take several steps, including enacting laws to regulate the real estate market and ensure that developers prioritize building affordable housing units.

It is also essential for the government to invest in infrastructure, such as public transportation and roads, to ensure that people have access to affordable housing options in different areas. Moreover, the government should regulate the housing market to prevent developers from engaging in unethical and misleading advertising practices.

In addition, the government can promote transparency and accountability in the real estate market by implementing systems to monitor and regulate real estate transactions, including the use of electronic property registration and monitoring systems.


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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.

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