Pakistan Housing Supply Nov2020

Pakistan Housing Supply Scan
Yan Zhang
Namoos Zaheer
Fizzah Sajjad
Hala B Malik
Usman Tahir
Saheem Khizar
Sana Malik
Fariha Tariq
November 2020
CONTEXT
Pakistan faces immense affordable housing challenges
• Pakistan has a growing population that is rapidly urbanizing

• Pakistan is said to be facing a housing shortage of 10 million
units (SBP 2019)
• Majority of unmet demand emanates from low and lower-
middle income groups
• Nearly half of the population lives in informal settlements and
overcrowding/densification is increasing
• Housing in the formal market primarily targets high-income
groups and investors
• Housing options for low - lower-middle income groups are far
and few in between
• Housing in the formal market is beyond the buying reach of
the majority of the population
• Mortgage finance to GDP ratio is 0.25 – lowest in South Asia
OBJECTIVES
To gauge supply side responsiveness

of major housing markets in the context
of further injection of long-term funding
to the Pakistan Mortgage Refinancing
Company under the proposed Additional
Financing to the Pakistan Housing
Finance Project.
• Inform subsidy design to deepen the
mortgage market (reaching lower-
income groups)
• Eligibility criteria for property value
• Identify supply side interventions

(regulatory reforms and/or
investments) to remove bottlenecks for
private developers to expand to the
affordable housing space
Spatial Distribution of Housing Typologies

METHODOLOGY
SAMPLING PROCEDURE SAMPLING CRITERIA
Approval Status
▪ Objective: Identifying new housing projects that offer
▪ Only approved schemes and projects
built-up units or apartments*
Location
▪ Cities of focus: Karachi, Lahore, Rawalpindi, ▪ Mix of urban and peri-urban schemes
Faisalabad, Hyderabad and Peshawar**
Size of Units
▪ References sought through: ▪ Houses: up to 10 Marla
▪ Association of Builders and Developers (ABAD) ▪ Apartments: Studio, 1B, 2B, 3B, 4B
▪ Real Estate Agents
Price of Units
▪ Real Estate Marketing Agencies
▪ Priority given to projects with units priced (i)
▪ Government Officials Up to PKR 5 million, and (ii) between PKR 5
to 11 million
▪ Zameen.com Web Search
*Where construction has been initiated or planned since 2017

*Data collection for Rawalpindi and Hyderabad is based on a different
methodology. In these two cities, a select number of developers
offering plots and built up units have been interviewed using prior
contacts
METHODOLOGY
SHORTLISTING
FINDINGS
▪ Limited supply of new formal housing projects offering built-up units:
▪ Limited supply of new built-up units below PKR 5 million
▪ Most new housing projects offer developed plots:

• Majority of homes built by residents themselves;
• In some cases, developers construct a limited number of built-up units for marketing purposes;
• In some cases, investors and contractors build a limited number of units in new housing projects to
make a high returns
▪ A high number of new housing projects have been initiated without formal regulatory
approvals across all cities
▪ New apartment building projects are being initiated across all cities:
• Apartments include standalone residential projects as well as multiuse apartment and commercial
buildings;
• Apartments are typically being constructed close to the city-center;
• Apartment prices vary considerably within each city, but offer lower prices as compared to built-up
units in the city-centre.
METHODOLOGY
STRUCTURE OF QUESTIONNAIRE FOR HOUSING DEVELOPERS
(1) (2)
SHORTLISTED
DEVELOPER PROFILES
SCHEMES
GENERAL GENERAL
SCHEME BUSINESS
INFORMATION INFORMATION
PRODUCT (1a) (2a)
SPECIFIC HOUSING VALUE
DATA CHAIN - EXPERIENCES
(1b) AND CONSTRAINTS
FUTURE (2b) FUTURE
PROJECTIONS CONSTRUCTION
(1c) (2c) PLANS
PERCEPTIONS ABOUT
THE CONSTRUCTION
PACKAGE
(2d)
METHODOLOGY
LIMITATIONS
▪ Limited sample size due to a small number of projects offering built-up units
▪ Difficulties establishing contact with developers for telephonic interviews
▪ Developer reluctance to be interviewed (specifically in Faisalabad, Hyderabad)
▪ Sample size limited further as some projects had been stalled due to a lack of funds
KEY FINDINGS
PESHAWAR: SURVEYED SCHEMES
Projects in the urban city centre

provide water, electricity, gas,
sanitation. Schools, health facilities
and public transport options are
close by.
Safiya Homes
Peri-urban Projects in peri-urban areas typically
3.5 marla houses do not offer gas. Transport and
Subsidized sale price: PKR 2,350,000 public amenities are available, but
are fewer in number.
Land value: PKR 0.35 million/marla
Emerald Lodges Deans Towner

Urban City Centre Urban City Centre
3.5 marla houses 1B, 2B, 3B, 4B apartments
Sale price: PKR 9,800,000 Land value: PKR 2 million/marla
City
Centre Meridian Heights
Urban City Centre
1B, 2B, 3B apartments
Prime Town Apartments

Iman Apartments
Urban City Centre
Urban City Centre
Land value: PKR 2–2.5 million/marla
PESHAWAR
Peri-Urban
3.5 marla house*
Average covered area: 606 sqft
No. of storeys: 1
SUBSIDIZED SALE PRICE: PKR 2,350,000

Land value: PKR 1,225,000
350,000 PKR per marla x 3.5 (52% of Sale Price)
ANNUAL GROSS RENTAL YIELD: PKR 120,000

(5.1% of Sale Price)
Construction Cost: PKR 1,090,800

1800 PKR per sqft Explaining the subsidized sale
price:
This product is offered by an affordable

BASE COST: PKR 2,315,000 housing developer whose mission is to
(Land value + Construction Cost) offer low-cost housing. This developer
sells market rate serviced plots within the
same scheme to subsidize the costs of
up to 3.5 marla houses for lower-income
groups. The sale prices of the 3.5 marla
units are therefore much lower than the
market rate. This model is illustrative of
the fact that houses will need to be
subsidized in some form for them to be
* Sample Size: 1 project (see Annex for more details)
affordable.
PESHAWAR
PROJECTED COSTS OVER THE NEXT 3 YEARS
Peri-Urban
3.5 marla house
Average covered area: 606 sqft; No. of storeys: 1
The base cost of a 3.5 marla house in a peri-urban area is projected to

increase at an average minimum rate of 19.7% over the next 3 years
5,000,000
4,465,813
4,500,000
4,000,000
3,500,000
3,013,959
3,000,000
2,315,800
PKR
2,500,000
2,000,000
1,500,000 1,225,000
1,451,855
1,000,000
1,090,800
500,000
-
2020 2021 2022 2023
Land Value* Construction Cost** Total Base Cost†

*Land value calculated at an estimated 17.6% annual
increase projected by developers over the next 3 years.
** Construction cost calculated at an estimated 10% annual

increase in prices, based on trends from previous years
† Base Cost = Land Value + Construction Cost for Average

Covered Area
PESHAWAR
Urban
3.5 marla house*
Number of storeys: B+2
SALE PRICE: PKR 9,800,000

1,400,000 PKR per marla x 3.5 (50% of Sale Price)
ANNUAL GROSS RENTAL YIELD: PKR 630,000 (6.42% OF SALE PRICE)

2500 PKR per sqft
BASE COST: PKR 7,087,500

(Land value + Construction Cost)
*Sample Size: 1 project (see Annex for more details)

PESHAWAR
Urban
3.5 marla house
Average covered area: 875 sqft; Number of storeys: B +2
The base cost of a 3.5 marla house in an urban area is projected to

12,000,000 11,311,563
10,000,000
8,400,000
8,000,000
7,087,500
PKR
6,000,000
4,900,000
4,000,000
2,911,563
2,187,500
2,000,000
-
2020 2021 2022 2023
Land Value* Construction Cost** Total Base Cost† *Land value calculated at an estimated 17.6% annual
increase projected by developers over the next 3 years.


Covered Area
PESHAWAR
Apartments
2021 2022 2023

Average Average Average Average Average
Average Average Projected Projected Projected
construction construction cost Annual
covered cost per sqft of apartment
Land Value Base Price sale price Rental Yield
Apartment Apartment Apartment
area (sqft) (PKR)* (PKR) (PKR) Base Price Base Price Base Price
(PKR) (PKR) (PKR)
(PKR)** (PKR)** (PKR)**
180,000
1 bed 706 2,500 1,765,000 1,045,926 2,810,926 3,125,000 (5.76%)
3,092,019 3,401,220 3,741,342
342,000
2 bed 936 2,500 2,340,000 1,386,667 3,726,667 4,987,500 (6.8%)
4,099,333 4,509,267 4,960,193
378,000
3 bed 1,242 2,500 3,105,000 1,840,000 4,945,000 6,362,500 (6%)
5,439,500 5,983,450 6,581,795
489,600
4 bed 1,735 2,500 4,337,500 2,570,370 6,907,870 9,186,667 (5.3%)
7,598,657 8,358,523 9,194,375
* Calculated on the basis of average land value of an apartment in a 6 storey apartment building (see Annex for more details)
Sample Size: 4 projects (see Annex for more details)
** Projected base price (land value + construction cost) calculated at an estimated 10% annual increase in prices, based on
trends from previous years
PESHAWAR
PROJECTED COSTS OVER THE NEXT 3 YEARS 2021 PROJECTION
Apartments Base cost†:
1 bed apartment: PKR 3,092,019
Both land value and construction per sqft are projected to
increase at a minimum of 10% annually for apartments
10,000,000
9,194,375
9,000,000
2022 PROJECTION
8,000,000 Base cost†:
6,907,870 1 bed apartment: PKR 3,401,220
7,000,000 6,581,795
6,000,000
4,945,000 4,960,193 4 bed apartment: PKR 8,358,523
PKR
5,000,000
3,726,667
4,000,000
3,000,000 3,741,342
2,000,000 2,810,926
1,000,000
2023 PROJECTION
Base cost†:
0 1 bed apartment: PKR 2,741,342
2020 2021 2022 2023 2 bed apartment: PKR 4,960,193
Axis Title 3 bed apartment: PKR 6,581,795
1 bed 2 bed 3 bed 4 bed
† Base Cost = Land Value + Construction Cost for Average Covered Area. Average annual increase in
both land value and construction cost per sqft is projected to be in the range of 10%.
FAISALABAD: SURVEYED SCHEMES
sanitation. Schools, health facilities and
public transport options are close by.
Projects in peri-urban areas typically do

not offer gas. Transport and public
amenities are available, but are fewer
in number.
Riaz ul Jannah
Housing Scheme
Safiya Homes
Urban City Centre
Peri-Urban
8 marla houses
3.5 marla houses
Sale price: PKR 9.8
Subsidized sale price: PKR 2.35 million
million
Land value: PKR 0.9
million/marla
Express Mall and Residency

Urban City Centre
Studio, 1B, 2B
Land value: ~ PKR 3 million/marla
FAISALABAD
Peri-Urban
3.5 marla house*
No. of storeys: 1

350,000 PKR per marla x 3.5 (79% of Sale Price)

(4.6% OF SALE PRICE)
Construction Cost: PKR 855,000

*Explaining the subsidized sale
1800 PKR per sqft price:
This product is offered by an affordable

BASE COST: PKR 2,080,000 housing developer whose mission is to
(Land value + Construction Cost) offer low-cost housing. This developer
units are therefore much lower than the
market rate. This model is illustrative of
the fact that houses will need to be
subsidized in some form for them to be
* Sample Size: 1 project (see Annex for more details) affordable.
FAISALABAD
Peri-Urban
3.5 marla house
The base cost of a 3.5 marla house in a peri-urban area is projected to

4,500,000
4,151,964
4,000,000
3,500,000
3,013,959
3,000,000
2,500,000
2,080,000
2,000,000
1,500,000 1,225,000
1,000,000
1,138,005
855,000
500,000
-
2020 2021 2022 2023
*Land value calculated at an estimated 17.6% annual increase
projected by developers over the next 3 years.


Covered Area
FAISALABAD
Urban
8 marla house*
No. of storeys: 2

900,000 PKR per marla x 8 (48% of Sale Price)

(3.76% OF SALE PRICE)

2500 PKR per sqft
*Explaining the subsidized sale

BASE COST: PKR 16,700,000 price:
Not many developers offer built up units
in the major cities of Pakistan, but of the
few that offer built up units for sale, it is
not uncommon to construct a select
number of houses for marketing
purposes and attract clients to the
scheme. The built up units are also used
to enhance land values in the scheme.
* Sample Size: 1 project (see Annex for more details)
FAISALABAD
Urban
8 marla house
The base cost of a 8 marla house in an urban area is projected to

30,000,000
27,044,500
25,000,000
20,000,000
16,700,000
14,400,000
PKR
15,000,000
9,500,000
10,000,000 12,644,500
7,200,000
5,000,000
-
2020 2021 2022 2023
Land Value* Construction Cost** Total Base Cost† *Land value increase calculated based on average projected
increase in rates by developers over the next 3 years.


Covered Area
FAISALABAD
Apartments
2021 2022 2023

Average Construction Average Average Average Average Projection of Projection of Projection of
covered cost per sqft Construction cost Land Value Base Price Sale price Apartment Apartment Apartment
area (sqft) (PKR) of apartment (PKR) (PKR)* (PKR) (PKR) Base Price Base Price Base Price
(PKR)** (PKR)** (PKR)**
Studio 433 2,500 1,082,500 953,744 2,036,244 3,863,000 2,239,868 2,463,855 2,710,241
1 bed 720 2,500 1,800,000 1,585,903 3,385,903 5,380,000 3,724,493 4,096,943 4,506,637
2 bed 871 2,500 2,177,500 1,918,502 4,096,002 5,836,000 4,505,602 4,956,162 5,451,779
Sample Size: 1 project (see Annex for more details) * Calculated on the basis of average land value of an apartment in a 6 storey apartment building (see Annex for more details)
** Base Cost = Land Value + Construction Cost for Average Covered Area. Average annual increase in both land value and
construction cost per sqft is projected to be in the range of 10%.
FAISALABAD
Studio apartment: PKR 2,239,868
Both land value and construction per sqft are projected to increase
at a minimum of 10% annually for apartments
6,000,000
5,451,779 2022 PROJECTION
5,000,000
Base cost†:
4,506,637 Studio apartment: PKR 2,463,855
3,385,903
3,000,000 2,710,241
2,036,244
2,000,000
2023 PROJECTION
1,000,000
Base cost†:
Studio apartment: PKR 2,710,241
0
2020 2021 2022 2023
Studio 1 bed 2 bed
LAHORE: SURVEYED SCHEMES
Al Noor-Orchard
Peri-urban
3.5, 5 marla houses
Sale Price: PKR 4,700,000 (3.5
marla), PKR 7,750,000 (5 marla)
Dream Gardens City

Centre
Peri-Urban
5, 7, 10 and 20 marla houses
Royal Residencia
Sale price: PKR 12,956,370 (5
Peri-Urban
marla), PKR 17,000,000 (7 marla),
4, 6, 8 and 10 marla houses
PKR 21,500,000 (10 marla)
Sale Price: PKR 9,000,000 (4 marla),
PKR 13,000,000 (6 marla), PKR
16,000,000 (8 marla)
Al-Hayat Residencia
Safiya Homes
Peri-Urban
Peri-Urban
3.5 marla houses (single storey &
Land value: PKR 1 million/marla
double storey)
Subsidized sale price: PKR 2,550,000
(single storey) / PKR 3,750,000
(double storey)
LAHORE
Peri-Urban
3.5/4 marla house*
No. of storeys: 2
AVERAGE SALE PRICE: PKR 5,816,000

Average Land value: PKR 2,408,0000
~640,000 PKR per marla (41.4% of Sale Price) 2 out of the 3 products studied
offer subsidized sale prices for
ANNUAL GROSS RENTAL YIELD: PKR 240,000 different reasons:
(4.3% of Sale Price)
One product is offered by an affordable
housing developer whose mission is to
offer low-cost housing. This developer
Construction Cost: PKR 3,524,000 units are therefore much lower than the
2400 PKR per sqft market rate.
The second product is built for marketing

purposes. For the few developers that
BASE COST: PKR 5,932,000 offer built up units for sale, most choose
(Land value + Construction Cost) to construct a select number of houses
for marketing purposes and attract
clients to the scheme. The built up units
are also used to enhance land values in
the scheme.
* Sample Size: 3 projects (see Annex for more details)

LAHORE
Peri-Urban
3.5/4 marla house
The base cost of a 3.5/4 marla house in a peri-urban area is projected to

9,000,000
8,211,088
8,000,000
7,000,000
5,932,733
6,000,000
5,000,000 4,690,976
PKR
4,000,000 3,524,400 3,520,111
3,000,000
2,408,333
2,000,000
1,000,000
-
2020 2021 2022 2023 *Land value calculated at an estimated 11% annual increase

Covered Area
LAHORE
Peri-Urban
5-6 marla house*
Number of storeys: 2

~950,000 PKR per marla (42% of Sale Price)
ANNUAL GROSS RENTAL YIELD: PKR 607,500 (5.1% OF SALE PRICE)

2600 PKR per sqft

*Sample Size: 3 projects (see Annex for more details)

LAHORE
Peri-Urban
5/6 marla house
Average covered area: 1900 sqft; Number of storeys: 2
The base cost of a 5/6 marla house in a peri-urban area is

projected to increase at an average minimum rate of 9.9% over
the next 3 years
14,000,000 13,263,214
12,000,000
10,005,000
10,000,000
8,000,000 6,684,747
PKR
6,000,000 5,062,500
6,578,468
4,000,000 4,942,500
2,000,000
-

Covered Area
LAHORE
Peri-Urban
7-8 marla house*

~967,000 PKR per marla (43% of Sale Price)
ANNUAL GROSS RENTAL YIELD: PKR 765,000 (5% OF SALE PRICE)

2750 PKR per sqft

*Sample Size: 2 projects (see Annex for more details)

LAHORE
Peri-Urban
7/8 marla house
The base cost of a 7/8 marla house in a peri-urban area is

projected to increase at an average minimum rate of 13% over
the next 3 years
25,000,000
19,736,068
20,000,000
15,000,000 13,835,000
PKR
10,835,006
10,000,000
7,147,500
8,901,063
6,687,500
5,000,000
-
2020 2021 2022 2023
*Land value calculated at an estimated 16% annual increase
Land Value* Construction Cost** Total Base Cost† projected by developers over the next 3 years.


Covered Area
LAHORE
Peri-Urban
10 marla house*

~1,050,000 PKR per marla (48% of Sale Price)
ANNUAL GROSS RENTAL YIELD: PKR 1,080,000 (5% OF SALE PRICE)

2500 PKR per sqft

*Sample Size: 1 project (see Annex for more details)

LAHORE
Peri-Urban
10 marla house
The base cost of a 10 marla house in a peri-urban area is

projected to increase at an average minimum rate of 10% over
the next 3 years
25,000,000 23,625,250
20,000,000
17,750,000
15,000,000 13,975,500
PKR
10,500,000
9,649,750
10,000,000
7,250,000
5,000,000
-

Covered Area
LAHORE
Apartments
Average 2021 2022 2023

Average Average Average
Average Base Cost Average Average
Projected Projected Projected
construction construction cost Annual
covered cost per sqft of apartment
Land Value per sale price Rental Yield
Apartment Apartment Apartment
area (sqft) (PKR)* Apartment Base Cost Base Cost Base Cost
(PKR) (PKR) (PKR) (PKR)
(PKR) (PKR)** (PKR)** (PKR)**
164,894
1 bed 333 2,500 832,500 246,667 1,079,167 2,748,249 (6%)
1,187,083 1,305,792 1,436,371
332,761
2 bed 672 2,500 1,680,000 497,778 2,177,778 5,546,016 (6%)
2,395,556 2,635,111 2,898,622
538,261
3 bed 1,087 2,500 2,717,500 805,185 3,522,685 8,971,011 (6%)
3,874,954 4,262,449 4,688,694
* Calculated on the basis of average land value of an apartment in a 6 storey apartment building (see Annex for more details)
Sample Size: 1 project in peri-urban Lahore (see Annex for more details)
** Projected base price (land value + construction cost) calculated at an estimated 10% annual increase in prices, based on
trends from previous years
LAHORE
Both land value and construction per sqft are projected to increase at a
minimum of 10% annually for apartments 2022 PROJECTION
5,000,000 4,688,694 Base cost†:
4,500,000
3,522,685
3,500,000
2,898,622
3,000,000
PKR
2,500,000 2,177,778
2,000,000
1,436,371
1,500,000 1,079,167 2023 PROJECTION
1,000,000 Base cost†:
500,000
0 3 bed apartment: PKR 4,688,694
2020 2021 2022 2023
1 bed 2 bed 3 bed
KARACHI: SURVEYED SCHEMES
sanitation. Schools, health facilities and
public transport options are close by.
Projects in peri-urban areas typically do

not offer gas. Transport and public
amenities are available, but are fewer
in number.
Olympic Pride Phase 2

Peri-Urban
Studio, 1B, 2B, 3B Apartments
Alrauf Castle
Urban City Centre
2B, 3B Apartments Index Palace
Land value: PKR 4 million/marla Urban City Centre
3B Apartments
Index Residency
Urban City Centre
Kingwood Manor Apartments 4B Apartments
Urban City Centre Land value: PKR 5.3 million/marla
4B Apartments
Land value: PKR 6 million/marla
KARACHI
Apartments
Average Average Average 2021 2022 2023

Average Total Cost Projection of Projection of Projection of
covered construction construction cost sale Annual
Land Value* of an Apartment Apartment Apartment
area cost per sqft of apartment
(PKR) apartment price Rental Yield
Base Price** Base Price** Base Price**
(Sqft) (PKR) (PKR) (PKR) (PKR)
84,000
Studio 418 2,633 1,100,594 1,315,698 2,416,292 2,325,000 2,657,922 2,923,714 3,216,085
(3.6%)
120,000
1 bed 721 2,633 1,898,393 2,269,422 4,167,815 2,541,000 3,707,018 4,077,720 4,485,492
(4.7%)
378,000
2 bed 1100 2,633 2,896,300 3,462,364 6,358,664 7,925,000 6,994,530 7,693,984 8,463,382
(4.7%)
588,000
3 bed 1400 2,633 3,686,200 4,406,645 8,092,845 12,333,333 8,902,130 9,792,343 10,771,577
(4.7%)
720,000
4 bed 2200 2,633 5,792,600 6,924,728 12,717,328 25,300,000 13,989,061 15,387,967 16,926,764
(2.8%)
Sample Size: 5 projects (see Annex for more details) * Calculated on the basis of average land value of an apartment in a 6 storey apartment building (see Annex for more details)
** Base Cost = Land Value + Construction Cost for Average Covered Area. Average annual increase in both land value and
construction cost per sqft is projected to be in the range of 10%.
RAWALPINDI: SURVEYED SCHEMES
DHA Phase 2
Peri-Urban
Developed plots of varying sizes
Land value: PKR 1,0151,032 /marla
Top-City 1
Peri-Urban
Developed plots of varying sizes
Land value: PKR 705,555/marla
DHA Homes/DHA Valley
Peri-Urban
5M, 8 M built up units + plots
Land value: 240,000/marla
[Subsidized land price for DHA]
RAWALPINDI
Peri-Urban 2021 PROJECTION
5 marla plot 5 marla land value:
PKR 3,696,334
2022 PROJECTION
5 marla land value:
PKR 4,036,397
AVERAGE LAND VALUE: PKR 3,384,922

PKR 676,984 per marla x 5
2023 PROJECTION
Average Construction Cost: PKR 2,406 per sqft 5 marla land value:
PKR 4,407,745
* Land cost calculated at an estimated 9.2% annual increase in

* Sample Size: 3 projects (see Annex for more details) prices
RAWALPINDI
Peri-Urban 2021 PROJECTION
10 marla plot 10 marla land value:
PKR 9,403,333
2022 PROJECTION
10 marla land value:
PKR 10,268,440
AVERAGE LAND VALUE: PKR 8,611,111

2023 PROJECTION
Average Construction Cost: PKR 2,566 per sqft 10 marla land value:
PKR 11,213,136
* Land cost calculated at an estimated 9.2% annual increase in

* Sample Size: 2 projects (see Annex for more details) prices
HYDERABAD
Urban 2021 PROJECTION
3 marla plot 3 Marla Land Cost:
PKR 1,735,800
2022 PROJECTION
3 Marla Land Cost:
PKR 1,909,380 PKR
LAND VALUE: PKR 1,578,000

2023 PROJECTION
Construction Cost: PKR 1,200 per sqft (by residents themselves) 3 Marla Land Cost:
PKR 2,000 per sqft (commercial rates) PKR 2,100,318
* Land cost calculated at an estimated 10% annual increase in

* Sample Size: 1 project prices
KEY FINDINGS
CURRENT LAND VALUES, CONSTRUCTION COSTS AND SALE PRICES
ACROSS KEY CITIES
Urban Built Up Units Peri-Urban Built Up Units Apartments

Average Average Average Average
Land Value Constructio Land Value Constructio Constructio
Sale Price Sale Price SQFT per Sale Price
per SQFT n Cost per per SQFT n Cost per n Cost per
per SQFT per SQFT apartment per SQFT
(PKR) SQFT (PKR) SQFT SQFT
(PKR) (PKR) (PKR)
Peshawar 5,147 2,500 10,294 1,287 1,800 2,468 1,155 2,500 5,043
Faisalabad 3,309 2,500 6,893 1,287 1,800 1,628 674 2,500 7,698
Lahore - - - 4,025 2,562 9,316 697 2,500 8,253
Rawalpindi - - - 3,418 2,486 - - - -
Karachi - - - - - - 1,168 2,633 7,320
Hyderabad 2,338 2,000 - - - - - - -
KEY FINDINGS
CURRENT LAND VALUES, CONSTRUCTION COSTS AND SALE PRICES ACROSS KEY
CITIES
Average Sale Price per SQFT across cities

12,000
10,866
10,294
10,000
8,253
8,000 7,698
7,320
6,893
5,998
6,000
5,043 4,855
4,000
2,468
2,000 1,628
0
Peshawar Faisalabad Rawalpindi Karachi Lahore Hyderabad
Urban Built Up Units Peri-Urban Built Up Units Apartments

KEY FINDINGS
Construction cost by typology across key cities

25,000,000
20,189,288
20,000,000
15,000,000
PKR
10,000,000 9,500,000
6,687,500 7,250,000
4,595,460 5,798,730
4,942,500
5,000,000 3,524,000
2,187,500 855,000
1,300,000 1,090,800
-
3M 3M Peri Urban 5M 8M 10M
Peshawar Hyderabad Rawalpindi Faisalabad Lahore

KEY FINDINGS
AVERAGE HOUSING PRICES ACROSS 6 KEY CITIES IN 2019
Urban Built Up Units Peri-Urban Built Up Units Apartments*
Average Average Average Average Average

Price of Price of Price of Price of Price of
3m 5m 7/8 M 10 m 3m 5m 7/8 M 10 m
studio 1 bed 2 bed 3 bed 4 bed
Average Average Average Average Average Average Average Average
apartm apartm apartm apartm apartm
Price Price Price Price Price Price Price Price
ent ent ent ent ent
Peshawar 9.8 2.3 3.1 4.9 6.3 9.1

(12.8) (23.2) (27.5) (32.4) (2.6) (2.9) (3.85) (8.41) N/A (4) (5) (8.5) (13.9)
Faisalabad 15 1.5 3.9 5.4 5.8

(10.5) (18) (25.8) (40) (2.45) (3.1) (6.5) (8.8) (4) (5.7) (8) N/A N/A
Lahore 5.8 11.8 16.5 21.5 2.7 5.5 8.9

(16.2) (25.9) (34.4) (54.2) (2.7) (3.5) (7.2) (8.3) (3.6) (4.8) (5.8) (11.9) (14)
Rawalpindi 5.5 10.5

(15.6) (26.6) (42) (49.5) (2.3) (2.6) (5.3) (6.8) (7.0) (7.7) (8.3) (12.9) (16.7)
Karachi 2.3 2.5 7.9 12.3 25.3

(8.5) (23) (68) (80) (1.8) (4.4) (6.5) (15) (1.6) (6.8) (19.9) (33) (41.5)
Hyderabad 3.2
(8.9) (30.3) (27) (35) (1.4) (2.5) (8.3) N/A (4.6) (1.8) (4.6) (7.2) (8.1)
* Urban and peri-urban apartment values have been averaged out.

XX - Values extracted from data collected in interviews
(yy) - Average values from Zameen.com for comparison
KEY FINDINGS
AVERAGE HOUSING PRICES ACROSS 6 KEY CITIES IN 2020
Housing prices by size (Zameen.com)

90
80
70
60
PKR (Millions)
50
40
30
20 PKR 6 million for

5-10 Marla Houses
10
0
3M 5M 7M 10M 3M 5M 7M 10M Studio 1B 2B 3B 4B
PKR 3.5 million for
Urban Built up units Peri-urban built up units Apartments
3-5 Marla Houses
Peshawar Faisalabad Karachi Hyderabad Rawalpindi Lahore
KEY FINDINGS
NEARLY ALL INTERVIEWED DEVELOPERS OFFER FLEXIBLE PAYMENT PLANS WITH SHORT TENURES
COMMON PAYMENT PLAN FEATURES
▪ Down payment range: 20% – 30% of property value*
▪ Payment on possession: ~10%
▪ Tenure range: 1 – 4 years
▪ Frequency of payment: Monthly, quarterly, bi-annual
▪ Payment plan terms: Flexible & frequently adapted

to meet client needs
* In some instances, increases to 40-50% closer to project completion

KEY FINDINGS
SUPPLY-SIDE VALUE CHAIN ACROSS KEY CITIES
KEY FINDINGS
SUPPLY SIDE
LAND ACQUISITION
TIME REQUIRED* KEY CONCERNS:

(range) 1 month – 5 years
1. Lack of transparency – graft practices during land

20-30% for apartments
PERCENTAGE OF registration and transfer processes. Without bribery,
COST delays are common;
50-70% for houses
ROADBLOCK TO 2. Technical errors in computerized systems cause delays
DEVELOPMENT – bribery still demanded;
Low to Medium
3. Lack of inter-department coordination (patwari,

revenue department, municipal offices);
4. Unnecessarily complicated process: ownership is

transferred after two steps: (i) registration of sales deed
and (ii) mutation (inteqal). In many cases, mutation
never takes place.
*Depends on resources, number of landowners, easier for apartments vs. housing schemes
KEY FINDINGS
SUPPLY SIDE
PROJECT APPROVALS AND NO OBJECTION CERTIFICATES (NOCs)
TIME REQUIRED KEY CONCERNS:

(range)
3 months – 4 years
1. Permits and approvals required from multiple departments
PERCENTAGE OF
COST* 1 - 3% causing delays and impeding ease of business;
2. Lack of inter-department coordination: developers have to

ROADBLOCK TO follow-up separately with different departments;
DEVELOPMENT Medium to High
3. Outdated housing rules and regulations, particularly for the
construction of apartments;
4. Delays in implementation of timelines as specified in existing

byelaws;
5. Dependency on individual bureaucrats for approvals;
6. Minor inconsequential objections raised at each step causing

delays;
7. Influence of political affiliations on approval status
8. Graft practices
*Not a high % of cost per se, but significantly increases project costs due to delays
KEY FINDINGS
SUPPLY SIDE
CONSTRUCTION PERMITS FOR BUILT-UP UNITS
TIME REQUIRED KEY CONCERNS:

(range)
1 month – 9 months
1. Differences in byelaws of approving agencies
PERCENTAGE OF
COST ~1%
2. Limited adherence to timelines by approving
agencies
ROADBLOCK TO
DEVELOPMENT Low
KEY FINDINGS
SUPPLY SIDE
TITLE TRANSFERING
KEY CONCERNS:
TIME REQUIRED Up to 2 months
1. Inefficiencies in patwari system;
2. Condominium laws have not been formulated. In

ROADBLOCK TO
Low to medium the case of apartments – land is not transferred to
DEVELOPMENT
customers. Only a transfer letter is given on the
developer’s letterhead. Customers cannot get bank
loans.
KEY FINDINGS
MAJORITY OF RESPONDENTS BELIEVE THAT THE CONSTRUCTION PACKAGE WILL HAVE A LIMITED
IMPACT ON HOUSING SUPPLY
Perceived impact of the construction Perceived impact of the construction package

package on enhancing housing supply on enhancing low-cost housing supply
(% of respondents) (% of respondents)
9% 5%
14%
36% 55%
82%
Low Medium High

Low Medium High
*Responses from 17 developers

across KHI, PESH, RWP, FSB, HYD
KEY FINDINGS
PERCEIVED IMPACT OF CONSTRUCTION PACKAGE
KEY CONCERNS:
1. Serves interests of large developers, or those with black money;
2. One-window operations meaningless if authorities continue to return applications within the stipulated time-period but with minor
objections. Implementation mechanisms need to be clearer;
3. Limited trust in the public sector and its capacity to deliver. Developers unwilling to risk their credibility and reputation by
partnering with the government;
4. Limited profitability in low-cost housing due to high land costs. Not considered feasible. Smaller units are also seen as increasing
land wastage and driving up costs;
5. Investors only interested in housing with high profit margins, e.g. DHA, Bahria Town, Lake City;
6. Subsidies will be ineffective as they are not based on accurate land and housing prices. Building in peri-urban
areas w/o requisite infrastructure is ineffective;
7. Paperwork requirements by bank is unrealistic: low-income households will remain ineligible for loans;
KEY FINDINGS
PERCEIVED IMPACT OF CONSTRUCTION PACKAGE
KEY CONCERNS:
8. Low-income households will not be able to afford housing after COVID-19;
9. Built-up units require large amounts of capital. Risks too high for small developers;
10. City-specific diagnosis, planning and interventions required for reforms to be effective;
11. Incentives have been announced, but there is no impact on the ground. Reforms require time.
Departments are non-existent or lack capacity;
12. Construction package is more of a marketing technique being used by the government;
13. For reforms to be effective, it is also important to amendments byelaws;
14. Will be successful only if FBR and other actors move quickly;
15. Facilitating NOCs and approvals biggest concern

ANNEX
PESHAWAR
KEY FINDINGS: PESHAWAR
INTERVIEWED SCHEMES: 4 APARTMENT PROJECTS & 2 HOUSING SCHEMES OFFERING BUILT-UP UNITS
▪ Scheme 1: ▪ Project 1: ▪ Project 3:

Market rate units, which would fall in the premium category. Location: Urban Location: Urban
Area: 2.6 kanals Area: 10 kanals
Location: Urban
Units: 115 Units: 205
Area: 7.5 kanals
Unit sizes: 1b, 2b, 3b, 4b Unit size: 2b, 3b, 4b
Units: 32
Unit size: 3.5 marlas
▪ Project 2: ▪ Project 4:
Location: Urban Location: Urban
▪ Scheme 2: Area: 2.5 kanals Area: 7.75 kanals
Developed by an affordable housing developer whose
Units: 77 Units: 153
mission is to offer low-cost housing. This developer sells
market rate serviced plots within the same scheme to Unit size: 2b, 3b, 4b Unit size: 1b, 2b,3b
subsidize the costs of up to 3.5 marla houses for lower-
income groups. The sale prices of the 3.5 marla units are
therefore much lower than the market rate. This model is
illustrative of the fact that houses will need to be
subsidized in some form for them to be affordable.
Location: Peri-urban
Area: 200 kanals
Units: 250 built-up,
362 plots
Unit size: 3.5 marlas
Total number of units Construction status Average Sales Average Occupancy

Built-up units Apartments
being constructed for all projects 2020 2020
832 282 550 On-going 75.6% 11.4%

BREAKDOWN OF SURVEYED SCHEMES [OFFERING BUILT UP UNITS + APARTMENT BUILDINGS]
Project location Project approval status Project size (kanals) Developer Business Size*
17% 17%
33%
67%
83% 83% 100%
Urban Peri-urban Approved Under process <= 10 kanals >100 kanals Small (50-999 units in the last three years)
N= 6, Built-up units = 2, Apartments = 4

* Peshawar has very few big developers present in the city.
PAYMENT PLAN DETAILS
Payment plans offered ▪ Average down payment: 25% – 30% of property value*
▪ Payment on possession: 10%
▪ Average time period: 1 – 1.5 years
▪ Frequency of payment: Monthly or quarterly

100%

Yes
▪ Mortgages: Not offered
* Increases to 40-50% closer to project completion

PROJECTED SUPPLY
Do you have projects in the pipeline that will Do you have plans to launch new projects
offer built-up units or apartments? offering apartment units in Peshawar in
(% of respondents) the next 3 years?
17% 17%
83%
83%
Yes No
Yes No
• Developers interested in new opportunities, but • Feasibility plans being developed

majority do not have any concrete plans • Developers own small parcels of land for construction purposes
• Estimated 1000 – 2000 new units
• 2-3 bed apartments most common
• Price range dependent on location
SUPPLY-SIDE VALUE CHAIN
EXPERIENCE WITH APARTMENT CONSTRUCTION AND SALES
▪ Demand for apartments is increasing due to:

• In-migration from other cities (consequence of terrorism);
• Nuclearization of families due to inter-generational transfers of inheritance;
• Absence of affordable housing units in the city centre (high land prices);
• Preference for housing units w/ higher proximity to transport and key amenities;
• Preference for housing units w/ lower maintenance requirements.
▪ Challenges
o Outdated byelaws;
o Ineffective parking provisions;
o Projects challenged due to environmental and privacy concerns;
o Rapidly rising construction costs;
o Construction material not available locally;
o Finishing products not available locally. Difficulties in assessing product quality;
o Speculative development;
o Capital flight to other cities (due to terrorism)
o Land grabbing;
o Lack of skilled labour. Don’t know how to use machines. Need to offer incentives for training
ESTIMATING LAND VALUE FOR APARTMENTS BY NO. OF STOREYS
Current Land Value per Kanal: 40,000,000 PKR
Land 1 Bed 2 Bed 3 Bed 4 Bed

No. of 1 Bed 1 Bed 2 Bed 2 Bed 3 Bed 4 Bed 4 Bed
Value Apt – 1 Bed Apt – 2 Bed Apt – 3 Bed – 3 Bed Apt – 4 Bed
Storeys Land Apt – Apt – Apt – Apt – Apt – Apt – Apt –
per Land Apt – Land Apt – Land Constr Apt – Land Apt –
in Value Constr Averag Constr Averag Averag Constr Averag
Kanal Value @ Base Value @ Base Value @ uction Base Value @ Base
Buildin per sqft uction e Sale uction e Sale e Sale uction e Sale
per 706 Price 936 Price 1242 Cost Price 1735 Price
g Cost Price Cost Price Price Cost Price
floor sqft sqft sqft sqft
13,333,33
3 2,963 2,091,852 3,856,852 2,773,333 5,113,333 3,680,000 6,785,000 5,140,741 9,478,241
3
10,000,00
4 2,222 1,568,889 3,333,889 2,080,000 4,420,000 2,760,000 5,865,000 3,855,556 8,193,056
0
5 8,000,000 1,778 1,255,111 3,020,111 1,664,000 4,004,000 2,208,000 5,313,000 3,084,444 7,421,944
6
1,765,000
3,125,000
2,340,000
4,987,500
3,105,000
6,362,500
4,337,500
9,186,667
6,666,667 1,481 1,045,926 2,810,926 1,386,667 3,726,667 1,840,000 4,945,000 2,570,370 6,907,870
7 5,714,286 1,270 896,508 2,661,508 1,188,571 3,528,571 1,577,143 4,682,143 2,203,175 6,540,675
8 5,000,000 1,111 784,444 2,549,444 1,040,000 3,380,000 1,380,000 4,485,000 1,927,778 6,265,278
9 4,444,444 988 697,284 2,462,284 924,444 3,264,444 1,226,667 4,331,667 1,713,580 6,051,080
10 4,000,000 889 627,556 2,392,556 832,000 3,172,000 1,104,000 4,209,000 1,542,222 5,879,722
FAISALABAD
KEY FINDINGS: FAISALABAD
HOUSING INFORMALITY IN FAISALABAD, MUCH LIKE OTHER KEY CITIES IN PAKISTAN, IS HIGH.
INTERVIEWED SCHEMES: 1 APARTMENT PROJECT & 2 HOUSING SCHEMES OFFERING BUILT-UP UNITS
▪ Scheme 1: ▪ Project 1:
Area: 450.5 kanals Area: 5 kanals
Units: 25 built-up, 435 plots Units: 72
Unit size: 8 marla built-up units Unit sizes: Studio, 1b, 2b
▪ Scheme 2:
market rate serviced plots within the same scheme to
subsidize the costs of up to 3.4 marla houses for lower-
therefore much lower than the market rate. This model is
illustrative of the fact that houses will need to be
Area: 220 kanals
Units: 367 built-up, 322 plots
Unit size: 2.25, 3.25, 3.4 marla built-up units

Built-up units Apartments for all projects 2020 2020
being constructed
464 392 72 On-going 98% 27%
* 4 apartment projects were shortlisted as part of the sampling process. Developers from 2 refused to
be interviewed, while 1 project has become dormant because of the lack of funds.
Project location Project Approval Status Project size (kanals) Developer Business size*
33% 33% 33%
67% 67% 67%

100%
Urban Peri-urban Approved <= 10 kanals >100 kanals Medium Small
N=3, Built-up units = 2, Apartment = 1

*Small = - 50-999 units in the last 3 years , Medium = 1000-4999 units in the last 3 years
Payment plans offered

▪ Average down payment: 25% – 30% of property value
▪ Average time period: 1 – 3 years

100%
Yes
▪ Mortgages: Offered by one developer through
HBFC
OBTAINING REGULATORY APPROVALS
District Planning High Level

Town Municipal
New project and Design Design Approval
Authority
Committee Committee
Headed by the Deputy Final approvals as per

Headed by the
Commissioner byelaws
Commissioner
Issue approvals for land Scrutinizes designs

conversions (w/o architects)
7 departments have to
issue NOCs (WAPDA,
WASA, Fire Brigade
etc)
PROJECTED SUPPLY
Do you have projects in the pipeline

that will offer built-up units or
apartments?
(% of respondents)
• Developers have plans to offer developed plots

(not built-up units)
• There is interest in expanding if city-specific

bottlenecks are addressed
100%
No
CITY SPECIFIC CONSTRAINTS AS IDENTIFIED BY DEVELOPERS
• Land values in the suburbs are lower. However, residents are not interested in moving to apartments in the
suburbs due to the lack of requisite infrastructure. There are a number of areas in the city-centre that have
infrastructure and where housing can be developed. Such sites and opportunity areas and sites have to be
identified in the master plan. However no efforts have been made so far;
• Land conversion fee is still required in residential urban areas. This is a major hurdle and disincentive.
Developers with political connections are frequently exempt from paying such fees. The fees would be
acceptable if the government offered services for high density development, but this is not the case;
• Faisalabad Peri-Urban Structure Plan (FPUSP) was finalized in 2015. Changes in the plan do not overlap with
records in the Revenue Department. Residential land still listed as agricultural land. Land-use is changed
only for political reasons. This is a major hurdle to development;
• FPUSP is only relevant on paper. After the finalization of the plan, 70-80 roads were declared as commercial.
There will be limited success without implementation of the plan;

Studio
Land Studio Studio Studio 1 Bed Apt 1 Bed Apt 2 Bed Apt
No. of Land Apt – 1 Bed Apt 1 Bed Apt 2 Bed – 2 Bed Apt 2 Bed Apt
Value per Apt – Apt – Apt – – Land – – Land
Storeys in Value per Land – Base – Average Construct – Base – Average
Kanal per Construct Base Average Value @ Construct Value @
Building sqft Value @ Price Sale Price ion Cost Price Sale Price
floor ion Cost Price Sale Price 720 sqft ion Cost 871 sqft
433 sqft
3 20,000,000 4,405 1,907,489 2,989,989 3,171,806 4,971,806 3,837,004 6,014,504
4 15,000,000 3,304 1,430,617 2,513,117 2,378,855 4,178,855 2,877,753 5,055,253
5 12,000,000 2,643 1,144,493 2,226,993 1,903,084 3,703,084 2,302,203 4,479,703
10,000,000 2,203 953,744 2,036,244 1,585,903 3,385,903 1,918,502 4,096,002

1,082,500
3,863,000
1,800,000
5,380,000
2,177,500
5,836,000
6
7 8,571,429 1,888 817,495 1,899,995 1,359,346 3,159,346 1,644,430 3,821,930
8 7,500,000 1,652 715,308 1,797,808 1,189,427 2,989,427 1,438,877 3,616,377
9 6,666,667 1,468 635,830 1,718,330 1,057,269 2,857,269 1,279,001 3,456,501
10 6,000,000 1,322 572,247 1,654,747 951,542 2,751,542 1,151,101 3,328,601

LAHORE
KEY FINDINGS: LAHORE
INTERVIEWED SCHEMES: 1 APARTMENT PROJECTS & 4 HOUSING SCHEMES OFFERING BUILT-UP UNITS
▪ Scheme 1: ▪ Scheme 3: ▪ Project 1:

Market rate units, which would fall in the premium category.
Slightly subsidized rate units, which would fall in the Location: Urban
Area: 2.6 kanals
Location: Peri-Urban premium category, in order to attract customers to the
scheme Units: 115
Area: 1500 kanals
Unit sizes: 1b, 2b, 3b, 4b
Units: 118 Location: Peri-Urban
Unit size: 4, 6, 8, 12 marlas Area: 4000 kanals (1200 kanals approved)
Units: 27
Unit size: 3.5, 5 marlas
▪ Scheme 2:
market rate serviced plots within the same scheme to ▪ Scheme 4:
subsidize the costs of up to 3.5 marla houses for lower- Market rate units, which would fall in the premium category.
therefore much lower than the market rate. This model is Location: Peri-Urban
illustrative of the fact that houses will need to be Area: 2300 kanals
Units: 400
Location: Peri-urban Unit size: 5, 7, 10, 20 marlas
Area: 264.8 kanals
Units: 562 built-up,
312 plots
Unit size: 3.6 marlas (single storey +
double storey)
Built-up units Apartments
being constructed for all projects 2020 2020
3407 1107 2300 On-going 61% 10%

Project Location Project Approval Status Project Size (kanals) Developer Business Size
0% 0%
100% 100%
<= 10 kanals >100 kanals

Urban Peri-urban Approved Under process Small (50-999 units in the last three years)
Medium (1000-4999 units in the last 3 years)
Large (5000+ units in the last 3 years)
N= 5, Built-up units = 4, Apartments = 1

Payment plans offered ▪ Average down payment: 25% – 30% of property value
▪ Payment on possession: 5 - 20%
▪ Average time period: 2.5 – 5 years

100%

Yes
▪ Mortgages: Not offered

PROJECTED SUPPLY
Do you have projects in the pipeline that will offer

Do you have plans to launch new projects offering
built-up units or apartments?
apartment units in Lahore in the next 3 years?
(% of respondents)
20%
80%
Yes No
Yes No
• Developers have projects in the pipeline, but
there aren’t many concrete details about them
finalized yet.
Land 1 Bed Apt 1 Bed Apt 2 Bed Apt 2 Bed Apt 3 Bed Apt
No. of Land 1 Bed Apt 1 Bed Apt 2 Bed Apt 2 Bed Apt 3 Bed – 3 Bed Apt 3 Bed Apt
Value per – Land – – Land – – Land
Storeys in Value per – Base – Average – Base – Average Constructi – Base – Average
Kanal per Value @ Constructi Value @ Constructi Value @
Building sqft Price Sale Price Price Sale Price on Cost Price Sale Price
floor 333 sqft on Cost 672 sqft on Cost 1087 sqft
3 6,666,667 1,481 493,333 1,325,833 995,556 1,610,370 4,327,870

2,675,556
4 5,000,000 1,111 370,000 1,202,500 746,667 1,207,778 3,925,278

2,426,667
5 4,000,000 889 296,000 1,128,500 597,333 966,222 3,683,722

2,277,333
2,748,249
1,680,000
5,546,016
2,717,500
8,971,011
3,333,333 741 246,667 1,079,167 497,778 805,185 3,522,685
832,500
2,177,778
7 2,857,143 635 211,429 1,043,929 426,667 690,159 3,407,659

2,106,667
8 2,500,000 556 185,000 1,017,500 373,333 603,889 3,321,389

2,053,333
9 2,222,222 494 164,444 996,944 331,852 536,790 3,254,290

2,011,852
10 2,000,000 444 148,000 980,500 298,667 483,111 3,200,611

1,978,667
KARACHI
KEY FINDINGS: KARACHI
INTERVIEWED SCHEMES: 5 APARTMENT PROJECTS
▪ Project 1: ▪ Project 3: ▪ Project 5:

Location: Urban Location: Urban Location: Peri-urban
Area: 1.7 kanals Area: 1.32 kanals Area: 12 kanals
Units: 15 Units: 32 Units: 298
Unit sizes: 4b Unit size: 3b Unit size: studio, 1b, 2b, 3b
Area: 2 kanals Area: 1.32 kanals
Units: 18 Units: 32
Unit size: 2b, 3b Unit size: 4b
Total number
of apartments Construction Average
Average Sales
being status for all Occupancy
2020
constructed projects 2020
395 1 Completed/ 4
78.0% 46.0%
On-going
KEY FINDINGS: Karachi
BREAKDOWN OF SURVEYED SCHEMES [OFFERING APARTMENT BUILDINGS]
Project location Project approval status Project size (kanals) Developer Business Size*
20% 20%
100%
80% 80%
100%
Urban Peri-urban Approved <= 10 kanals >10 kanals Small (50-999 units in the last three years)
Sample size = 5 apartments buildings

Payment plans offered ▪ Average down payment: 20% – 30% of property value
▪ Average time period: 4 years
▪ Frequency of payment: Monthly to bi-annually

100%

Yes
PROJECTED SUPPLY
Do you have plans to build new housing units Do you have plans to build additional apartment
in Karachi in the next 3 years? units in Karachi in the next 3 years?
40% 40%
60% 60%
Yes No Yes No
• Developers interested in new opportunities, • Feasibility plans being developed, while others are in the process of
however requested one-window operations for being launched
approvals • Developers own small parcels of land for construction purposes
• Those interested in offering new housing units • Estimated 10,600 new apartments are being built
are aiming to offer roughly 13,300 such units • 2-3 bed apartments most common
• Price range dependent on location
SUPPLY-SIDE VALUE CHAIN APARTMENTS
Design and Approving

New project Land Acquisition Structure Authority after Approval
Approval NOCs
Sindh Building Control
Multiple departments Final approvals are
Authority is one of the
like Revenue given after NOCs are
major approving
Department, KDA, received from various
authorities. Others are
register land acquisition departments
Malir Development
Authority, Karachi
Development Authority
etc.
Scrutinizes designs and

approves through 18
NOCs

1 Bed 2 Bed 3 Bed 4 Bed 4 Bed
No. of Land 1 Bed 1 Bed 2 Bed 2 Bed 3 Bed 4 Bed
Land Apt – 1 Bed Apt – 2 Bed Apt – 3 Bed – 3 Bed Apt – 4 Bed Apt –
Storeys Value Apt – Apt – Apt – Apt – Apt – Apt –
Value Land Apt – Land Apt – Land Constr Apt – Land Apt – Avera
in per Constr Averag Constr Averag Averag Constr
per Value @ Base Value @ Base Value @ uction Base Value @ Base ge
Buildin Kanal uction e Sale uction e Sale e Sale uction
sqft 721 Cost 1100 Cost 1400 Cost Cost 2200 Cost Sale
g per floor Cost Price Cost Price Price Cost
sqft sqft sqft sqft Price
3 28,328,433 6,295 4,538,845 6,437,238 6,924,728 9,821,028 8,813,290 12,499,490 13,849,456 19,642,056
4 21,246,325 4,721 3,404,133 5,302,526 5,193,546 8,089,846 6,609,968 10,296,168 10,387,092 16,179,692
5 16,997,060 3,777 2,723,307 4,621,700 4,154,837 7,051,137 5,287,974 8,974,174 8,309,674 14,102,274
6 14,164,217 3,148 2,269,422 4,167,815 3,462,364 6,358,664 4,406,645 8,092,845 6,924,728 12,717,328
12,333,333
25,300,000
2,896,300
3,686,200
5,792,600
1,898,393
2,541,000
7,925,000
7 12,140,757 2,698 1,945,219 3,843,612 2,967,741 5,864,041 3,777,124 7,463,324 5,935,481 11,728,081
8 10,623,163 2,361 1,702,067 3,600,460 2,596,773 5,493,073 3,304,984 6,991,184 5,193,546 10,986,146
9 9,442,811 2,098 1,512,948 3,411,341 2,308,243 5,204,543 2,937,763 6,623,963 4,616,485 10,409,085
10 8,498,530 1,889 1,361,653 3,260,046 2,077,418 4,973,718 2,643,987 6,330,187 4,154,837 9,947,437
RAWALPINDI
KEY FINDINGS: Rawalpindi
INTERVIEWED SCHEMES: 3 BUILT UP UNITS PROJECTS
Location: Peri-urban Location: Peri-urban
Area: 2,500 kanals Area: 9,000 kanals
Total Planned units: 2,275 Total Planned units: 4,000 plots
Total Built-up units: 1,241/2,275 Plot sizes: 5&10 Marla
Built-up unit sizes: 5 & 8 marla
▪ Project 2:
Area: 15,075 kanals
Total Planned Units: 3,000 plots
Plot sizes: 5&10 Marla
Construction status Average Sales Average Occupancy

Total planned units
for all projects 2020 2020
9,275 On-going 60.0% 20.0%

BREAKDOWN OF SHORTLISTED SCHEMES [OFFERING BUILT UP UNITS]
Project location Project approval status Project size (kanals) Developer Business Size
33% 33% 33%
67%
100%
100% 33%
<= 3000 kanals

>3000 kanals & < 9999 Kanals Small (50-999 units in last three years)
Urban Peri-urban Approved
> 9999 kanals Medium (1000-4999 units in the last three years)
Sample size = 3 schemes offering built-up units

Payment Plan Offered ▪ Average down payment: Up to 20% of property value
33% ▪ Average time period: 3-4 years
▪ Frequency of payment: Quarterly
67% ▪ Payment plan terms: Flexible & frequently adapted

Yes No
PROJECTED SUPPLY
Do you have plans to build additional housing Do you have plans to build additional apartment
units in Rawalpindi in the next 3 years? units in Rawalpindi in the next 3 years?
100% 100%
Yes No No
• Developers interested in new opportunities,

however requested for one-window operations
for approvals
• Those interested in offering new housing units
are aiming to offer an estimated 20,500 new
built up units
KEY FINDINGS: RAWALPINDI
Note: 2 out of 3 surveyed

Time: 6 months – 1 year RWP schemes are DHA
% of costs: ~3% schemes hence they are not
necessarily representative
Roadblock: Medium for other developers. DHA
has its own rules, and
timelines appear to be
shorter.
CITY SPECIFIC CONSTRAINTS AS IDENTIFIED BY DEVELOPERS
• Land values in the suburbs are getting higher due to expansion of the city towards the periphery.
• If public transport is made accessible to provide better access to peri-urban schemes for commuting to city,
that will encourage development in the outskirts of the city.
• Multiple departments are involved in providing NOCs for approval of a scheme by the RDA.
KEY FINDINGS: RAWALPINDI
Design and Approving

New project Land Acquisition Structure Authority after Approval
Approval NOCs
Revenue Department Rawalpindi Final approvals are

Development Authority given by RDA after
is major approving NOCs are received
authority for formal from various
schemes. departments
Detailed plan is
submitted according to
prescribed format and
fee to RDA
HYDERABAD
KEY FINDINGS: HYDERABAD

Pakistan Housing Supply Nov2020

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Pakistan Housing Supply Nov2020

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Pakistan Housing Supply Scan

• Pakistan has a growing population that is rapidly urbanizing

To gauge supply side responsiveness

• Identify supply side interventions

Spatial Distribution of Housing Typologies

SAMPLING PROCEDURE SAMPLING CRITERIA

*Where construction has been initiated or planned since 2017

▪ Limited supply of new formal housing projects offering built-up units:

▪ Limited supply of new built-up units below PKR 5 million

▪ Most new housing projects offer developed plots:

Projects in the urban city centre

Emerald Lodges Deans Towner

Prime Town Apartments

SUBSIDIZED SALE PRICE: PKR 2,350,000

ANNUAL GROSS RENTAL YIELD: PKR 120,000

Construction Cost: PKR 1,090,800

This product is offered by an affordable

The base cost of a 3.5 marla house in a peri-urban area is projected to

Land Value* Construction Cost** Total Base Cost†

** Construction cost calculated at an estimated 10% annual

† Base Cost = Land Value + Construction Cost for Average

SALE PRICE: PKR 9,800,000

ANNUAL GROSS RENTAL YIELD: PKR 630,000 (6.42% OF SALE PRICE)

Construction Cost: PKR 2,187,500

BASE COST: PKR 7,087,500

*Sample Size: 1 project (see Annex for more details)

The base cost of a 3.5 marla house in an urban area is projected to

** Construction cost calculated at an estimated 10% annual

† Base Cost = Land Value + Construction Cost for Average

2021 2022 2023

Projects in peri-urban areas typically do

Express Mall and Residency

SUBSIDIZED SALE PRICE: PKR 1,550,000

ANNUAL GROSS RENTAL YIELD: PKR 72,000

Construction Cost: PKR 855,000

This product is offered by an affordable

The base cost of a 3.5 marla house in a peri-urban area is projected to

** Construction cost calculated at an estimated 10% annual

† Base Cost = Land Value + Construction Cost for Average

SUBSIDIZED SALE PRICE: PKR 15,000,000

ANNUAL GROSS RENTAL YIELD: PKR 564,000

Construction Cost: PKR 9,500,000

*Explaining the subsidized sale

The base cost of a 8 marla house in an urban area is projected to

** Construction cost calculated at an estimated 10% annual

† Base Cost = Land Value + Construction Cost for Average

2021 2022 2023

Studio 1 bed 2 bed

Dream Gardens City

AVERAGE SALE PRICE: PKR 5,816,000

The second product is built for marketing

* Sample Size: 3 projects (see Annex for more details)

The base cost of a 3.5/4 marla house in a peri-urban area is projected to

4,000,000 3,524,400 3,520,111

† Base Cost = Land Value + Construction Cost for Average

AVERAGE SALE PRICE: PKR 11,860,000

ANNUAL GROSS RENTAL YIELD: PKR 607,500 (5.1% OF SALE PRICE)

Construction Cost: PKR 4,942,500

BASE COST: PKR 10,000,000

*Sample Size: 3 projects (see Annex for more details)

The base cost of a 5/6 marla house in a peri-urban area is

† Base Cost = Land Value + Construction Cost for Average

AVERAGE SALE PRICE: PKR 16,500,000