By Arslan Ahmad
Pakistan’s housing crisis demands more than an expansion of bank lending. It requires a system that connects land, finance, housing societies and construction to increase the actual supply of affordable homes. Punjab already possesses much of the institutional infrastructure needed to build such a system. The challenge is to bring these resources together under a coordinated, transparent and commercially sustainable framework.
The Punjab Provincial Cooperative Bank Limited (PPCBL), one of Pakistan’s oldest banking institutions with a history spanning more than a century, has been making efforts to modernize its operations. Over the past year or so, renewed leadership, restructuring initiatives and a growing focus on digitalization have signaled an effort to strengthen the institution. These developments deserve recognition. The next step, however, must be to connect the bank’s transformation with a broader provincial housing strategy. This is where the Punjab Cooperative Department has a central role to play. The department already has an institutional network, cooperative societies and an established banking relationship through PPCBL. Punjab also has a substantial base of cooperative housing societies, including organization that have become inactive, underperforming or insufficiently developed. Instead of creating another parallel institution or launching disconnected schemes, the government should assess this existing infrastructure and turn it into a functioning housing ecosystem. Viable societies should be revived, governance and land records verified, infrastructure developed, and financially sustainable projects supported through appropriate funding arrangements. The distinction between financing existing homes and financing new construction is critical. When housing finance mainly enables people to purchase properties that have already been built, it may improve access to ownership, but it does not necessarily increase the number of homes available in the market. If supply remains constrained while purchasing power expands, prices can rise further. By contrast, financing new construction can increase housing supply while creating jobs across construction, building materials, transport, engineering and related services.
Pakistan’s rising property prices reflect several factors, including land costs, construction materials, taxation, infrastructure constraints and limited formal housing supply. Credit expansion alone cannot explain the increase. Nevertheless, housing finance policy should be designed to ensure that greater access to credit translates into additional homes, rather than predominantly fueling transactions in existing properties. The commonly cited increase in the price of a well-constructed Five-Marla house—from approximately Rs7–9 million in earlier years to around Rs12–15 million in some markets today—illustrates the growing affordability challenge, although actual prices vary by location, specifications and date. A cooperative housing model could help address this imbalance and dormant assets into productive investment. PPCBL, working with the Cooperative Department, could support eligible societies through carefully assessed financing for roads, utilities, essential infrastructure and new residential construction. Separate, transparent arrangements could help eligible households purchase completed homes. Financing should be linked to verified land titles, approved layouts, credible development plans, cost estimates and realistic repayment capacity. Independent audits, strong governance and public reporting would be essential to protect both depositors and borrowers and to ensure that societies become financially sustainable rather than remaining dependent on repeated government support.
This approach also complements the federal government’s focus on housing affordability and the Prime Minister’s stated emphasis on simplifying banking documentation. A properly designed cooperative framework could streamline verification and coordination between the society, bank and relevant authorities. For straightforward cases with verified records and no legal or regulatory impediments, the objective should be to reduce unnecessary delays and make ownership and financing processes significantly faster. A single-day process may be achievable for selected, fully documented cases, but it should be a measurable service target—not a promise that overrides legal checks or property verification.
The provincial government should begin with a comprehensive review of cooperative housing societies, identifying which are active, which can be revived and which face unresolved legal or financial problems. It should then establish a dedicated cooperative housing development framework, select viable pilot projects and define measurable targets for new homes, infrastructure, employment, affordability and financial performance. PPCBL’s restructuring and digitalization should be aligned with this mission, while the Cooperative Department assumes responsibility for coordinating societies, improving governance and ensuring that projects are properly prepared. The State Bank of Pakistan and relevant federal authorities should be engaged wherever regulatory approval or policy coordination is required.
It needs to use its existing institutions more effectively. A modernized cooperative bank, a capable Cooperative Department and properly governed housing societies could form the foundation of a practical model for affordable housing and local economic growth. The objective should be clear: not merely to finance the purchase of homes, but to help build more of them. By converting dormant institutional capacity into productive investment, Punjab can make cooperative housing a meaningful instrument of public policy—expanding housing supply, supporting employment and bringing secure homeownership within reach of more Pakistani families.