The population of Pakistan is spiraling out of control. Every year, 3.7 million people add to the current figure of 194.5 million people making it the sixth most populous country in the world. In 1950 the population only stood at 33 million. So what is causing the sudden spike in population numbers?

Various factors contribute to a country’s population count. High fertility, declining mortality, customs of early marriages, a preference of sons, high infant mortality, poverty, education of women and lack of empowerment, beliefs and traditions are the main contributing factors. Pakistan now has the highest population growth of all Muslim countries with 1.89 percent compared to the average of between 1.2 and 1.6 percent in nearby countries like Bangladesh and Indonesia. With many positive population factors combining together analysts predict Pakistan’s population will soar to 227 million by 2025 with urban populations anticipated to double in the next 20 years.

However, this may present opportunities for housing developers to react to the growing population and their need for housing. It is estimated that Pakistan has a housing shortfall of over nine million units. Rapid urban population growth is the root of the shortage in housing with demand growing at a rate of 0.7 million units per year. There is a major inequality contributing to the problem. Households at the bottom 68 percent of the income distribution can only afford 1 percent of the available housing stock. Four million Pakistanis are now living in low-quality housing.

A major problem is the undersized mortgage sector—at just half a percent of GDP.  What is holding banks back? There is no one reason for the underdeveloped housing finance sector but the lack of an effective institutional framework, poor urban planning, the absence of a secondary mortgage market, a disorganized real estate sector and a complex system of property titles and land registration play a part.

“Significant reforms need to take place to fix this situation. Firstly, innovative approaches need to be adopted for affordable housing for example community mortgage programs like you can find in India,” said Saad Arshad, managing director of Lamudi Pakistan—the online property platform. “It would be really beneficial to the market to have credit guarantee schemes for low-income housing finance and microfinance banks should be supported,” said Arshad.

Without enforcing a strong regulatory authority to improve corporate governance and apply standards to the real estate sector, the availability of housing will not improve. If the real estate sector doesn’t become more transparent—a fact that online property platforms like Lamudi are seeking to address—then banks will be reluctant to finance projects with so much uncertainty, and a lack of capital will constrain future construction, it is a never ending loop that desperately needs to be addressed.