Real Estate and Housing Sector – Pakistan facing shortage of 8 million houses
Pakistan facing shortage of 8 million residential houses
Lahore (November 19, 2012) – Pakistan is facing shortage of around 8 million houses, which is growing with the ratio of 600,000 annually.
Quoting the central bank report, real estate industry experts said that the formal financial sector caters to only 1 to 2 per cent of all housing transactions in the country, whereas the informal lending caters up to 10 per cent of such transactions.
They said that one of the major components of the social infrastructure is housing, the lack of which begins to offset the positive effects of economic development. They pointed out that the housing sector is believed to affect an economy in different ways.
If majority of the population has access to adequate housing, they are more likely to participate economically, socially and politically in their communities, they observed.
Mian Ayaz Anwar, the Managing Director of the Zaitoon Group, a real estate development company, observed that the government should work as a regulator and provide incentives to private sector for the provision of subsidised homes to public.
He recommended the government to have strict control on prices of building materials. Further government may provide subsidised building material to ensure timely completion of houses. He said that a rapid urbanisation has become a common phenomenon for developing countries across the globe. However, it is a good sign because rapid urbanisation indicates economic development.
Responding to a question, he said the living standards of people are changing in cities, which is forcing us to add value to the communities. Now buyers want security, community centres, hospitals, cinemas, parks and even golf clubs all within their own neighbourhood so that they do not have to commute long distances,” he said.
He observed that it is responsibility of the State Bank of Pakistan to launch a First Home Mortgage Scheme on marginal interest for all income groups to bridge this gap of demand and supply.
If the housing sector grows, the allied industries of construction material, including cement, steel and a long chain of several other industries will also get boost, ultimately enhancing the GDP growth of the country. So, it would be vital for the central bank to give special attention to housing sector, as it is directly related to the growth of our economy as well as employment generation, he stressed.
He said that hydel power projects were politicised due to which country was facing an energy crisis. He said industrialisation was also stopped. He maintained that the privatisation of power sector is the only solution to the prevailing loadshedding in the country.
He urged the government to evolve a mechanism to privatise all the public sector enterprises that are generating a loss of billions of rupees annually. He said that their privatisation would not only help the government in getting rid of huge losses but would also strengthen the government’s revenue position.