After 68 years of establishment Pakistan is still a developing country and striving towards development. People are moving from rural to urban areas in order to search new jobs and achieve better education, medical and infrastructure facilities. This shows that in the coming there will be an equal ratio of population among rural and urban areas of Pakistan which is currently 35%. The prices of the house in cities are determined by the population and the number of migrations. Therefore, this article is based on the ratio house prices in Pakistan to the income ratio of year 2016.
Average salary in Pakistan
Pakistan is a country which has very rare laws concerned with the minimum wage of the labors. However, in the past year it was decided to be an amount of PKR 15000 per month. This makes an average amount of PKR 180,000 annually. Agreeing on a research it is said that in Pakistan and other countries the average salary is almost twice the minimum wage which makes the amount of PKR 360,000.
Average house price in Pakistan
The average house price in Pakistan is directly proportional to the size of the land. However, the average land size is reducing with time due to a speedy price hike of real estate properties in the last years. Previously it was supposed to the 15 Marla which is now reduced to 10 Marla land plots. The average price of the 10 Marla land plot is PKR 15,000,000.
Pakistan’s Average house price to Average Income Ratio
As discussed above the average house price in Pakistan in PKR 15,000,000 and average annual income is PKR 360,000. This shows the ratio of 40:1. It means that a normal citizen of Pakistan is supposed to earn for 40 years in order to achieve a house of 10 Marla in Pakistan. This ratio is extremely high and unaffordable.
Controlling High House Price to Income Ratio
This ratio indicates that the buying power of a common man in Pakistan is very low in order to purchase a house. This high ratio can be controlled in two ways. Firstly, the average income of a labor should be increased to rise the buying power and secondly housed should be constructed in an affordable range.