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How Much House Can You Afford?

How Much House Can You Afford?
Home affordability calculations

Houses are highly unaffordable in Pakistan. First reason of abnormal property prices in Pakistan is the fast rise of inflation than wages. Second reason is the shortage of housing as we need more than 10 million new units. Third and major reason is the influx of black money in real estate sector which has artificially increased the property prices.

What is the world affordable house price to income ratio?

World affordable house price to income ratio is 5:1. According to this ratio a person can buy a house after spending 5 years of income. But in Pakistan it’s approximately 14:1 which is highly unaffordable. The worldwide house affordability map can be viewed @ NUMBEO.

What house your salary can buy in 2017?

Single salary:

Earning per month = Rs. 15,000/-

House one can buy = 9 LAC

Earning per month = Rs. 25,000/-

House one can buy = 15 LAC

Earning per month = Rs. 50,000/-

House one can buy = 30 LAC

Earning per month = 1 LAC

House one can buy = 60 LAC

Two salaries: (In case both partners are working)

Combined earning of a working couple per month = Rs. 30,000/-

House they can buy = 18 LAC

Combined earning of a working couple per month = Rs. 50,000/-

House they can buy = 30 LAC

Combined earning of a working couple per month = 1 LAC

House they can buy = 60 LAC

Combined earning of a working couple per month = 2 LAC

House they can buy = 120 LAC

Pakistan housing market is in bubble phase

People or couples with 2 Lac per month salaries can buy just 5 Marla or 125 square yards house. This shows that housing is highly unaffordable in Pakistan and is in bubble zone ready to bust soon. Either prices will be down or we will see massive rise in salaries. But it’s better if government starts affordable housing developments, otherwise homelessness will increase in Pakistan.

Recommended:
Pakistan real estate market now and in the future

(10) Comments

  1. RIZWAN

    on   said 

    dear ghar47

    in lhr dha ph 6 what is the starting price of a plot 500 yards jahan construction allowed ho?? and plz tell the same thing abt ph 8 also

    Reply
  2. muhammad kamran

    on   said 

    I have been working in UAE for 12 years but still no house can afford only bought plot with very difficult for 10 lacs in Bahawalpur.

    Reply

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