The construction and sale of new homes make direct contribution to GDP, based on the value of the housing built. However, the sales of existing homes do not enter into the calculation of the nation’s domestic output, just as a used car sales do not get entered because the transaction does not represent a new production. However, purchases related to the transaction of existing home sale do get included in the GDP. For example, all payments for services rendered, such as real estate agent commissions, home inspection, attorney, and loan origination fees, are included.
Currently, Pakistan has a serious housing crisis and needs about 7 million additional housing units now, according to the data presented at the World Bank Regional Conference on Housing last year.
According to BMI research, the country’s real estate sector continues to be dominated by the two major issues of a chronic shortage of housing against a backdrop of rapid urbanization and rising population and the impact of security factors on the risk appetite of investors and developers.
The first of these factors remains as intractable as ever, with the most recent estimates identifying shortfall of 7.9mn houses. By contrast, the current government is committed to building just 1 million houses. Other estimates paint a similar picture with the Punjab province, with a population of 82 million, said to be facing a shortage of 5 million houses. By some accounts, nationally there is an incremental demand for 700,000 units a year against the annual construction of just 150,000 units.
As to the second factor, the major projects currently moving forward are being executed by risk-tolerant developers from regions such as the Gulf Cooperation Council(GCC) and government or government-linked landowners in Pakistan. This has significantly reduced the scope to provide housing at the level required to supply the backlog. Recently, however, there are reports that Malaysian developers are coming to Pakistan, according to Malaysian news agency Bernama in August 2009. The Malaysian developers are negotiating to build some 500,000 low-cost houses annually in various parts of Pakistan.
The recent Dubai debt crisis will likely hurt some Pakistani workers in the Gulf region. However, the flip side of Dubai troubles is that many of these Gulf developers will look at Pakistan where real estate investments have always been winners, regardless of the political or economic environment. The supply has continued to lag demand for housing, retail and office properties.
The Gulf and Malaysian investments in housing can potentially help resuscitate Pakistan's currently moribund economy by creating millions of new jobs directly and indirectly. Construction is one of the most labor intensive economic activity requiring large numbers of workers, creating hundreds of thousands of jobs. And when the buyers move in, they will demand all kinds of products and services to furnish their homes, thereby creating further employment opportunities. All of this is offers a great recipe for reigniting economic growth and renewed prosperity in Pakistan.
A new wave of housing construction offers an opportunity to the PPP leadership to live up to at least one of their election promises included in their "roti, kapda and makaan" platform. Looking back at the history of the political platforms that have succeeded, what comes to mind is the name of President Franklin Roosevelt and his "New Deal" , as well as the successive US Presidents' policies on "The American Dream" of home ownership for all. These policies helped reduce poverty and enhanced education and housing for a large number of people in the US. New housing construction can also help reduce poverty in Pakistan.
Related Links:
Food, Clothing and Shelter in India, Pakistan
Pakistan Real Estate Report Q4 2009
Dubai Debt Crisis
Food, Clothing and Shelter For All
What Does Pakistani Democracy Deliver?
Urbanization in Pakistan Highest in South Asia
Housing: Global and Local Perspectives
Uncle Sam Saves Fannie and Freddie
Pakistan Attracts FDI Despite Security Concerns
Witness a Failed State: Try Pakistan's M2
Doing Business Rankings of Countries
Post-911 Economic Boom in Pakistan
24 comments:
Here's an interesting report by Reuters in Pakistan:
By Alistair Scrutton
ISLAMABAD (Reuters) - If you want a slice of peace and stability in a country with a reputation for violence and chaos, try Pakistan's M2 motorway.
At times foreign reporters need to a give a nation a rest from their instinctive cynicism. I feel like that with Pakistan each time I whizz along the M2 between Islamabad and Lahore, the only motorway I know that inspires me to write.
Now, if the M2 conjures images of bland, spotless tarmac interspersed with gas stations and fast food outlets, you would be right. But this is South Asia, land of potholes, reckless driving and the occasional invasion of livestock.
And this is Pakistan, for many a "failed state." Here, blandness can inspire almost heady optimism.
Built in the 1990s at a cost of around $1 billion, the 228-mile (367-km) motorway -- which continues to Peshawar as the M1 -- is like a six-lane highway to paradise in a country that usually makes headlines for suicide bombers, army offensives and political mayhem.
Indeed, for sheer spotlessness, efficiency and emptiness there is nothing like the M2 in the rest of South Asia.
It puts paid to what's on offer in Pakistan's traditional foe and emerging economic giant India, where village culture stubbornly refuses to cede to even the most modern motorways, making them battlegrounds of rickshaws, lorries and cows.
There are many things in Pakistan that don't get into the news. Daily life, for one. Pakistani hospitality to strangers, foreigners like myself included, is another. The M2 is another sign that all is not what it appears in Pakistan, that much lies hidden behind the bad news.
On a recent M2 trip, my driver whizzed along but kept his speedometer firmly placed on the speed limit. Here in this South Asian Alice's Wonderland, the special highway police are considered incorruptible. The motorway is so empty one wonders if it really cuts through one of the region's most populated regions.
"130, OK, but 131 is a fine," said the driver, Noshad Khan. "The police have cameras," he added, almost proudly. His hand waved around in the car, clenched in the form of a gun.
On one of my first trips to Pakistan. I arrived at the border having just negotiated a one-lane country road in India with cows, rickshaws and donkey-driven carts.
I toted my luggage over to the Pakistan side, and within a short time my Pakistani taxi purred along the tarmac. The driver proudly showed off his English and played U.S. rock on FM radio. The announcer even had an American accent. Pakistan, for a moment, receded, and my M2 trip began.
Built in the 1990s by then prime minister Nawaz Sharif, it was part of his dream of a motorway that would unite Pakistan with Afghanistan and central Asia.
For supporters it shows the potential of Pakistan. Its detractors say it was a waste of money, a white elephant that was a grandiose plaything for Sharif.
But while his dreams for the motorway foundered along with many of Pakistan, somehow the Islamabad-Lahore stretch has survived assassinations, coups and bombs.
A relatively expensive toll means it is a motorway for the privileged. Poorer Pakistanis use the older trunk road nearby tracing an ancient route that once ran thousands of miles to eastern India. The road is shorter, busier and takes nearly an hour longer.
On my latest trip, I passed the lonely occasional worker in an orange suit sweeping the edge of the motorway in a seemingly Sisyphean task.
http://en.wikipedia.org/wiki/Golden_Quadrilateral
India has multiple mode of transport across cities
India has 92 airports with 12 international airports
http://travel.mapsofindia.com/transportation-and-communication/airports-in-india/airport-locations-in-india.html
http://www.aircraft-charter-world.com/airports/asia/pakistan.htm#M
where as pakistan has 42 civil airports. Further india has got one of the largest railway network to connect all corners of the country.
anon: "India has multiple mode of transport across cities.....
India has 92 airports with 12 international airports...where as pakistan has 42 civil airports. Further india has got one of the largest railway network to connect all corners of the country."
The numbers you quote for India are not impressive. Based on its population and area, India should have 5 to 7 times as many airports and larger railway track and road network as Pakistan.
Here's a sense of reality as pointed out by Dalrymple who compared both nations on 60th anniversary of partition:
"On the ground, of course, the reality is different and first-time visitors to Pakistan are almost always surprised by the country's visible prosperity. There is far less poverty on show in Pakistan than in India, fewer beggars, and much less desperation. In many ways the infrastructure of Pakistan is much more advanced: there are better roads and airports, and more reliable electricity. Middle-class Pakistani houses are often bigger and better appointed than their equivalents in India.
Moreover, the Pakistani economy is undergoing a construction and consumer boom similar to India's, with growth rates of 7%, and what is currently the fastest-rising stock market in Asia. You can see the effects everywhere: in new shopping centers and restaurant complexes, in the hoardings for the latest laptops and iPods, in the cranes and building sites, in the endless stores selling mobile phones: in 2003 the country had fewer than three million cellphone users; today there are almost 50 million."
William Dalrymple
14 August, 2007
The Guardian
Here's an Indian report from last year about India significantly lagging Pakistan in clean energy and CNG usage:
New Delhi, May 5, 2008
India is way behind Pakistan in terms of its gas pipeline network, with the neighbouring country’s network stretching around 56,400 km against its 10,500 km, connecting only 20 cities compared to Pakistan’s 1,050, industry body Assocham said.
Pakistan’s pipeline density, at present is 1044 km/mmscmd (million metric standard cubic meter per day) per day compared to 116 km/mmscmd of India, Assocham said in its paper on gas sector ‘A Comparison between India and Pakistan’.
The neighbouring country has created a 31,000 km distribution network to serve its domestic and commercial consumers in large locations, against the 11,000 km network that have so far been build in India to serve the needs of its consumers in limited pockets, the report said.
While Pakistan has nearly 1,600 CNG stations, India has 380. The gas throughput in Pakistan is 38 mmscmd per day as against 8.5 mmscmd gas in India.
The number of gas customers and vehicles running on CNG in Pakistan is about 19 lakh and 15.6 lakh respectively, while in India the number is 5.50 lakh and 4.60 lakh.
“The gas availability in Pakistan is undoubtedly quite large, compared to India but given the imports of gas and even its domestic availability in India, its pipeline network is extremely poor and the main reason attributed for the low and limited pipeline network in India is because this sector has been thoroughly regulated which has now been opened for competition,” Assocham president Venugopal Dhoot said.
The paper added that since the pipeline network in India does not reach out to most of the potential demand centres, a number of industrial projects, which would ideally run on gas, have to depend on much more costlier and more polluting alternative fuels.
“Thus the unmet gas demand in India is probably much higher than what is reported,” he said, adding India, “at present has only one major cross country pipeline in the form of Hizira-Bijaipur-Jagdishpur pipeline and there is estimated to be considerable unmet demand even in the states serviced by this pipeline”.
With the increased availability of gas, the country needs to gear up quickly to meet the increased requirement of cross country as well as regional and local downstream gas distribution networks, he said. — PTI
http://www.tribuneindia.com/2008/20080506/biz.htm#1
The corruption of Pakistani politicians is exceeded only by their incompetence. With economy in virtual recession, the FDI is dropping as reported by The News:
Thursday, December 17, 2009
KARACHI: Net foreign investment in Pakistan fell 25.6 per cent to $1.08 billion in the first five months of the 2009/10 fiscal year compared with $1.45 billion in the same period a year earlier, the central bank said on Wednesday.
Out of total foreign investment, foreign direct investment fell 52.2 per cent to $774.0 million in the first five months of the fiscal year which began on July 1 from $1.62 billion for the same months last year, the State Bank of Pakistan said.
But foreign portfolio investment flows reversed, with a $311.3 million inflow in the July to November period compared with an outflow of $162.9 million in the same period last year.
Authorities imposed a floor on the Karachi Stock Exchange benchmark index in August last year as political uncertainty and economic and security worries drained investor confidence.
The floor discouraged new investment and also led to a sharp outflow of funds, as foreign investors sold holdings in off-market trade.
The floor was removed in December. The International Monetary Fund (IMF) saved Pakistan from a balance of payments crisis with a $7.6 billion emergency loan package in November last year. The loan was increased to $11.3 billion on July 31.
Pakistan’s economy is in virtual recession as gross domestic product growth in the 2008/09 fiscal year of 2 per cent is about the same as population growth. The IMF has projected GDP growth flat at 2 per cent this fiscal year.
Security concerns over a Taliban insurgency based in the country’s northwest and chronic power shortages have also put off investors.
Here's a blogger' view Pakistan's cement industry:
Cement is one of the most important industries of Pakistan. Limestone and gypsum are the main raw materials for manufacturing of cement and they are present in abundance in Pakistan along with good supply of Natural gas. This great potential makes the country capable of producing cement not only for local use but also for export as well. Pakistan cement industry has exporting cement to the neighbouring countries like U.A.E, Afghanistan, India, Iraq and Russia.
At present there are 22 cement plants are operating in Pakistan with the production of approximately 9.403 million tonnes. Out of these 22 cement plants, 17 are private and 5 are publicr. 11 new plants are also in planning stage and the capacity of these plants is estimated around 12.988 million tonnes. The industry has achieved a growth of 32% with the domestic demand increasing by around 24.95% and the exports by nearly 111.86% according to the financial year end June 30, 2007 ratings. Recently the country has been able to export to some of the African countries as well.
Cement industry is divided into two main regions; the northern and the southern region. Northern region is producing 35.18 million tonnes and southern region is producing 8.89 million tonnes of cement per year.
Per capita consumption of cement is an indicator of rate with which any country is developing. Unfortunately per capita consumption of cement in Pakistan is less if we compare it with other developing countries. It is about 131 kg per person annually; whereas world average is about 270 kg. This less consumption is due to the negligence given to the construction sector. However in last few years consumption of cement showed some rise due to increased commercial activities, infrastructural development and increasing demand of constructing houses.
Local demand for the year 2007-2008 was 20 million tonnes. Pakistan has started exporting cement few years back and has earned repute as a premium quality cement producer in the global market in this short period. Pakistan exported around 7.716 million tonnes of cement in 2007-2008 and earned a foreign exchange of 459 million dollars. There is surely a great potential of growth in this industry in Pakistan.
http://pakistan360degrees.contentcreatorz.com/cement-industry-of-pakistan/
Here's a news story about construction expo in Pakistan:
The first ever international construction materials, property, furniture, stone and technology exhibition titled, ‘Build Pakistan 2012’, commenced yesterday at Lahore Expo Centre, Pakistan. The event is open for trade/corporate visitors only till tomorrow i.e. March 12, 2012.
Federal Minister for Information Dr Firdous Ashiq Awan inaugurated the event. Fakt Exhibitions CEO Saleem Khan Tanoli and others were also present at the ribbon cutting ceremony. Dr Firdous said such events are helpful to revive the construction industry in Pakistan, which is mother of allied industry and plays a vital role in economic revival.
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Pakistan’s soft image and avenues of investment in the country.
Earlier, Planning Commission Deputy Chairman Dr Nadeem Ul Haque also visited the exhibition. He went to different stalls and met domestic and international exhibitors. He said construction industry played vital role in the economic revival of any economy, so the Planning Commission had laid focus on this in its growth strategy.
Talking to the reporters, he said Planning Commission also recommended revitalisation of the construction in its growth strategy which was adopted by the government as well.
Dr Nadeem suggested changing in living style of Pakistanis for the promotion of residential flats. He said there was a need of policy change to run the construction industry and kick start construction activities in every town and cities. To a question about the growth rate, Dr Nadeem said at present the growth rate is 4.5 per cent, but Pakistan needs to grow at 9 to 10 per cent annually, just like its neighboring countries, like India and China.
The first Build Pakistan 2012 exhibition is featuring over 100 exhibitors, ranging from major global suppliers to regional agents and distributors of building and construction sector. As the largest event of its kind in Pakistan, Build Pakistan provides an unrivalled platform for architects, consultants, interior designers, builders, landscapers, developers, contractors, machinery and equipment manufacturers and suppliers from the public and private sectors to network, source and specify the latest building and construction products and services. The event provides the most comprehensive product offering for the building and construction industry.
http://www.pakistantoday.com.pk/2012/03/build-pakistan-2012-expo/
Here's an excerpt of a report in The Nation on shares market rise on the news of increasing cement sales:
The local bourse broke the 14,000 level on an intraday basis for the first time since 16th May 2008. The positive sentiment was on the back of expectations of the issuance of the much awaited SRO on capital gain tax rules. Additional impetus also came after the release of the robust cement dispatches data and easing of Consumer Price Index (CPI) to 10.8 per cent in March-12. As a result, the KSE 100 Index gained 113 points (up 0.8 per cent WoW) to close at 13,875 level. Volumes improved by 5 per cent WoW to 387mn shares indicating the upbeat investor sentiments. Foreigners, on the other hand, offloaded shares worth $1.6 million. Pakistan Bureau of Statistics (PBS) released CPI figure for the month of March-12 during the week. CPI clocked in at 10.8 per cent YoY in March-12, down from 11.0 per cent in February-12. The marginal improvement in the headline inflation came on the back of ease in food prices.
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Release of robust cement dispatches numbers kept the cement stocks in the limelight once again. Consequently, LUCK and DGKC both outperformed the market by 11.6 per cent and 6.9 per cent respectively. Conversely, HUBC underperformed the market by 2.4 per cent on news that the company’s dividend payments may get delayed after FBR froze the company accounts.
Though the market increased by 0.8 per cent during the week but it managed to cross 14,000 points level on intraday basis during the week. Cement stocks remained in the limelight on the back of increase in export price to Afghanistan and expectations of healthy earnings. Restoration of gas supply to Engro Corp new plant also kept the stock in investors’ radar. While lower than expected inflation numbers for March did not have any impact on the market sentiments.
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As per monthly data released by All Pakistan Cement Manufacturers Association (APCMA) total dispatches witnessed a modest rise of 4 per cent YoY to 23.63m tons in 9MFY12 as against the total dispatches of 22.81m tons in the corresponding period last year. During the 9MFY12 growth in overall industry dispatches was primarily on account of 8 per cent YoY rise in local dispatches to 17.39m tons in comparison of the local dispatches of 16.04m tons in the same period last year. Local dispatches were higher in north zone by 7 per cent YoY to 14.09m tons and in south zone by a sharp 13 per cent YoY to 3.30m tons. On MoM basis, local dispatches were seen substantially higher by 32 per cent MoM mainly because of the reconstruction activities in flood affected areas, normal construction and on going work on mega projects.
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/09-Apr-2012/cement-sector-outperforms-others-at-kse
Here's a UNHCR report on new houses for Dera Ghazi Khan flooad affectees:
The UN refugee agency has joined local authorities in handing over ownership of 400 new one-room homes to a fishing community in Pakistan left homeless by devastating floods in 2010.
The families receiving the new shelters belong to the Jam community, which for decades has lived along the banks of the Indus River in makeshift huts, or simply under their boats. Their homes and what few belongings they had were washed away by the floods that inundated large areas of Pakistan in 2010. UNHCR wrote about their plight in a story published on this web site in May last year.
"We're not used to such houses," said Zakir Hussain, who moved into the Boat Model Town with his family several months ago. "At first, we experienced a bit of culture shock, but now we are so grateful to have a solid roof over our heads."
The land for the new development was provided by the government of Punjab province and each unit consists of one common room, a small kitchen and separate toilet.
The families' new ownership of land and property is complemented by the gradual restoration of many basic rights that this marginalized group have been denied for decades. There are also plans for them to receive national identity cards, and they will have their own community centre, a mosque and water supply as well as access to health care and education.
The shelters are part of nearly 4,000 one-room houses that UNHCR has constructed for flood victims in areas of Punjab that were damaged in the floods. The agency's flood response interventions targeted the most vulnerable among the flood victims, including people with disabilities, female headed households and families unable to rebuild their own houses.
"We used to drink river water and we had no health and sanitation facilities, no schooling for the children," said Zakir's wife, Bashir, recalling their former lives. "For us, who were born and grew up on the boats, having a home and being able to live a normal life is like a dream."
Speaking at the handover ceremony, UNHCR Representative in Pakistan Neill Wright thanked the government of Pakistan and, in particular the Punjab administration, for providing the land. "Access to shelter is a basic human right," he said. "I am proud that together with government and non-governmental partners, UNHCR has been able to support the government in assisting some of the most vulnerable victims of the devastating 2010 floods."
In addition to the shelters in Punjab, UNHCR has constructed nearly 30,000 additional homes in the provinces of Sindh, Balochistan and Khyber Pakhtunkhwa, which were also affected by floods in 2010 and again in 2011.
http://www.unhcr.org/4fbcd6f09.html
Here's an ET report on housing market in Pakistan:
In Pakistan, average monthly expenditure on rent per household has increased at an annual rate of over 13% for the last nine years, according to the Pakistan Bureau of Statistics (PBS).
A look at the Household Integrated Economic Survey (HIES) released by the PBS reveals that an average Pakistani family spent Rs888 every month on house rent in 2001-02; which rose to Rs2,693 in 2010-11; signifying an annualised increase of 13.12% over a period of nine years.
Interestingly, in the same period, annual rise in average house rent in rural areas was 2.7% higher than the corresponding increase in urban areas – even though 85.63% of the populace of rural areas lives in owner-occupied houses. In contrast, 75.79% of the urban population lives in houses that they own.
Urban housing
The highest number of people living in rented houses in urban areas belongs to the third quintile of the population in terms of income distribution at 22.38%. The third quintile in income distribution is representative of the middle class in a society.
The lowest number of people living in rented houses in urban areas – 15.93% – belongs to the fifth quintile of the income distribution. This suggests that the richest people in urban areas are most likely to own the house they live in.
The HIES figures also reveal that the poorest people, belonging to the first quintile in urban areas, end up spending 83% more on house rent as compared to a comparable group living in rural areas. Similarly, the richest people belonging to the fifth quintile living in urban areas tend to spend 220% more on average house rent per household, as compared to a comparable segment of the population living in rural areas.
Home ownership and per-capita incomes
“Rise in per-capita income does not seem to display any correlation with the percentage of owner-occupied houses in Pakistan,” economist Kaiser Bengali said, while talking to The Express Tribune. “In many cases, someone who works as a peon and earns a low monthly income can still own a house in Pakistan. This is so because people belonging to certain professions – such as the civil service, military, police, government teachers, journalists etc – receive free or subsidised land from the government or other trusts.”
Data supports Bengali’s view. Pakistan’s Gross National Income (GNI) per capita, formerly known as the Gross National Product per capita, increased by 9.62% annually between 2002 and 2011; but the number of persons living in owner-occupied houses over the same period remained almost stagnant at around 79% of the population.
Bengali says an overwhelming majority of Pakistanis can afford to live in their own houses because the free-market mechanism does not actually operate in the country’s real estate sector. Many people receive land on subsidised rates, he informs us, because of professional affiliations. “The government announces housing schemes regularly for its employees in different ministries and departments. That enables people to acquire land at negligible costs,” he says; adding that land is the primary expense in real estate, because physical structures can be built gradually over an extended period of time.
http://tribune.com.pk/story/414818/real-estate-the-pakistani-housing-and-accommodation-market/
Here's Gulf News on growth of upscale real estate developments in Pakistan:
Apart from ultra-modern residential and commercial projects undertaken on a massive scale, the concept of gated communities ensconced in the lap of extravagance isn’t just changing the dynamics of Pakistan’s luxury realty segment, but also the way residents of these projects are living in the country’s major cities like Karachi, Islamabad and Lahore. “The luxury property market in Pakistan has traditionally been unorganised and fragmented. However, the recent past has seen consolidation of a few developers who are stretching their capacities to the maximum to meet the growing market demand,” says Naveed Merchant, Managing Director, Merchant & Associates.
“REIT [real estate investment trust] regulations are in the process of formulation which will encourage large projects with sourced financing. While the Pakistan real estate market still lacks transparency and liquidity compared to more mature real estate markets, REITs would provide an opportunity to diversify the investor base in the sector through a regulated, tradable investment,” he says.
Nida Zahoor, Group Marketing Manager, Bahria Town, touted to be Asia’s largest private real estate developer, also vouches for this maturity in the market. “Generally the Pakistani luxury home buyer in this day and age, expects nothing but the best in quality. Most of them have travelled extensively to countries abroad, making them abreast with the latest trends in construction. Then there is also the growing middle class which is not as aware, but that too is changing over time” she says.
Zahoor says there is a shortage of one million homes in Pakistan with a 0.6 million (backlog) demand growing every year, which includes in it a large ratio of demand for luxury homes. In the next five years, predicts Zahoor, Pakistan will experience a tremendous growth in the luxury realty segment as awareness among the people, the trends, the policies by the government will give a fillip to this segment. So, what would Bahria Town’s benchmark project be? “It would be Bahria Golf City, Pakistan’s first ever branded luxury resort designed over a total area of 5.5 million square metres,” Zahoor says.
Bahria Golf City is expected to accommodate 18,000 people in about 7,500 housing units. “From architects such as BEAMS construction to Nayyar Ali Dada, interior designers such Wingchair, Cracknel landscape designers; and Kroll security consultants; we are working with the best in the world who have been involved in prestigious projects like the Burj Al Arab, KL towers, Atlantis Dubai and Jumeirah Beach Resort,” says Zahoor.
Bahria Town isn’t the only player in the market, there are several interesting offerings such as Lake City, a 2,104-acre development on the outskirts of Lahore, which has a plan to have almost 4,000 residences, hundreds of shops, malls and dozens of office buildings. “When the project was envisaged in 2004, it was obvious that future developments in real estate in Lahore could only take place towards the south and south west. The trend in Pakistan, outside Karachi, is not towards vertical expansion but horizontal expansion,” says Farouk Khan, ED Coordination, Lake City Holdings and Rida Sarfraz, GM Marketing and Events, Lake City Holdings.
Besides, there are other attractive projects such as Defence Raya, a 400-acre development and The Centaurus, a project featuring a five-level shopping mall, two residential complexes, the corporate complex and a luxurious five-star hotel in Islamabad...
http://gulfnews.com/gn-focus/pakistan/luxury-property-market-soars-to-new-heights-1.1061693
Here's an ET story on Naya Mazimabad, a new gated community in Karachi:
After many years in Karachi, a housing society was launched on Friday for people who may want to escape the commercialisation of their neighbourhoods but cannot afford to buy pricier property in say DHA, PECHS or Mohammad Ali Housing Society.
Naya Nazimabad City, a project of stockbroker and businessman Arif Habib, is located at a drive of 20 minutes from Water Pump Chowrangi in Federal B. Area. Another big broker, Aqeel Karim Dhedhi, has also put his weight behind the project.
Naya Nazimabad’s sponsors want to outdo Defence Housing Authority (DHA) and Bahria by completing the project in time.
“We are not targeting the people who live in Defence or Bath Island,” said Ovais Sohail, the project manager. “Our clientele will come from Gulshan, New Karachi and Nazimabad.”
The project will be developed in phases with the first one to be finished by 2015. “This entire city will take ten to eleven years to complete.”
Sponsors have hired around 150 personnel of the Frontier Constabulary for security of the project, which is located near the violence-prone Qasba Colony and between Pukhtunabad and Baloch Goth. The number of FC guards will be increased once residents move in, an official said.
Naya Nazimabad, with hills on one side and Manghopir Lake on the other, will house 300,000 people in single-storey units and flats. Since the development of the homes depends on demand, developers were unable to say exactly how many houses will be built.
Hospital, schools and markets are part of the project.
Naya Nazimabad will have its own bylaws. “It’s not like you can buy the plot and construct whatever type of house you feel like,” said Sohail. “The bylaws need to be followed. We will continue to work as the administrator.”
A single-storey house covering 160 square yards is being offered for 3 million rupees, with a 1.2 million-rupee debt component.
The chairman of AKD Securities, Aqeel Dhedhi, said that the project drew on inspiration from the Askari and Navy Housing Scheme projects. “There are no gated societies in Karachi,” he claimed. “Naya Nazimabad will have gates on all three societies that will be properly guarded."
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According to him, a well-developed society needs over 1,000 acres of land. “Getting that in Karachi is near-impossible. The city stands divided on ethnic lines. And for all those schemes coming on the Super Highway, security remains a concern.”
Naya Nazimabad is spread over 1,200 acres, most of which belonged to Javedan Cement plant, a company of the Arif Habib Group.
While manager Ovais Sohail was sure that they would be able to provide basic amenities, a lot of questions need to be answered. Karachi’s water utility is under increasing criticism for failing to meet the needs of tens of thousands of people. How would it ensure a supply to Naya Nazimabad? Sohail explained that it helped that they are located right near Hub, the dam from where Karachi gets its water. “Both the main supply conduits pass near the project,” he added. “And I don’t see any reason for us to be denied the supply.”
http://tribune.com.pk/story/294569/naya-nazimabad-city-big-business-group-launches-gated-housing-society-near-sakhi-hasan/
Here's an ET report on Emaar Alma Townhomes project in Islamabad:
With Spanish and Portuguese architectural designs, imported electrical and sanitary fittings, ironmongery for doors and design-fitted kitchens, Alma Townhomes offer dream homes for those wanting to invest in real estate.
The second phase of the housing project, that was opened for buyers by international real estate developer Emaar on Saturday, saw a large number of potential home owners from twin cities showing up. The two-day event is being held at a sales centre inside Emaar’s 400-acre gated community — Canyon Views.
Situated on the Islamabad Highway near the Grand Trunk Road (DHA Phase-II Extension), the Alma houses target a major segment in the housing market – end users who are looking for an “affordable” house in a safe and sustainable community, according to Emaar Pakistan Head of Development and Projects Shairyar Salim. The company has completed the first phase, which is fully occupied.
The earthquake-resistant housing units, which occupy eight to 12 marlas and have three to four bedrooms, start with a price of Rs14 million, which is slightly high compared to Bahria Town’s Safari Villas and Defence Housing Authority (DHA). A 10-marla house Safari Villas and DHA cost Rs12 million and Rs11.5 million on average respectively, according to a Rawalpindi-based real estate agent Waseem Kiyani.
He said that a ready-made house on 10 marlas in Bahria Enclave can cost around Rs15 million with a one-year payment plan.
Facilities at these housing projects seem comparable, although Salim believes Emaar’s designs are more “advanced”, as they draw on the developer’s experience of making international housing projects.
The Alma Townhomes might also have a superior security apparatus. The integrated community has a three-tier security plan which includes two outer boundary walls and a security patrol on the streets.
“With Emaar, you’re confident that your money will not go down the drain,” said Asif Akhtar, a resident of the Alma Townhomes Phase-I who works for the Army Welfare Trust.
“They deliver on their promises, and their quality of construction and services are simply amazing,” he added.
The houses will be made available under a two-year payment plan and the construction is expected to be completed within that time frame, said Emaar Pakistan Head of Sales and Marketing Uzair Adil.
According to Salim, houses in Phase-I were quick to sell out and a similar response is expected from the second phase. The new community will also have access to facilities that were constructed for the first phase, such as a school and markets.
“The advantage of Phase-II is that the infrastructure is already present and the roads are almost complete,” he added.
Salim went on to explain that the houses will be built in groups of 50 to 60 units, with each group having a park, play area and BBQ area. Plans to build a hospital, shopping malls, community club houses and mosques are also underway.
Shaukat Zia, a civil engineer from Rawalpindi, who was present at the launch with his family, seemed quite impressed after being briefed about the project.
However, he was concerned about the investment, saying that a house in the townhomes seemed only feasible for the elite.
Salim said Emaar is looking to sell around 150 units in the first batch, which is approximately one-third of the total units.
Emaar Pakistan has invested over $2.4 billion in the country since 2007, according to information available on its website.
http://tribune.com.pk/story/437366/coming-soon-for-islooites-a-new-housing-community/
http://www.emaar.com/pakistan/
5,000 flats planned for Islamabad, reports Express Tribune:
In a move to address the growing shortage of affordable housing in Islamabad, the government has approved an instalment-based housing project in the capital.
The project, which has similarities to the Ashiana Housing Project introduced by the Punjab government, was approved by Prime Minister Raja Pervez Ashraf on Friday.
Explaining the project, Housing Secretary Kamran Lashari told The Express Tribune that work on the “much-needed project” will begin within three to four months.
During a meeting at the Prime Minister’s Secretariat on Friday, Lashari informed the PM that between 3,500 and 5,000 flats would be constructed on some 50 acres of land owned by Pakistan Railways.
Lashari, who is a former chairman of the Capital Development Authority (CDA), said that the land to be used for the proposed project near Sabzi Mandi in Sector I-11 is not disputed and that the ministry will negotiate with the Railways authorities over its acquisition.
The total estimated cost of the project is Rs28 billion. The housing secretary also informed Ashraf that only 28,000 housing units were available for government servants against a total demand of 50,000.
Approving the project in principle, PM Ashraf constituted a task force comprising representatives of the housing, railways and finance ministries along with the CDA to assess the price of the land and directed the task force to present its recommendations within a week.
According to a handout issued after the meeting, Ashraf said the government recognises the acute shortage of housing for government servants in the capital. He said this needs to be addressed with out-of-the-box solutions so that some relief can be provided to the bureaucrats.
Notably, the Capital Development Authority (CDA) has not developed any new sectors in the capital for over 23 years.
“We need to work out criteria for allotment of flats and ensure their construction according to international standards and affordability,” said the prime minister, adding that due to the shortage of land for construction in Islamabad, the Capital Development Authority (CDA) should encourage high-rise buildings in the city.
http://tribune.com.pk/story/425848/accommodation-woes-after-years-of-wait-housing-for-govt-servants-on-cards/
Here's an Express Tribune story of real estate boom in Faisalabad, Pakistan:
Yet unlike stories of most other business shutdowns, Crescent Sugar Mills’ decline came not because of economic slowdown, but rather the economic success of the city – and especially the neighbourhood – it is located in. The factory is 100-acre complex in Nishatabad, a neighbourhood in Faisalabad that used to be on the outskirts of the city, but has increasingly become host to residences that house the city’s growing affluent middle class.
In the 1960s, Nishatabad was on the outskirts of the city, which allowed farmers to bring their sugar cane to the factory easily, using large trailers and trucks. As the decades wore on and Faisalabad’s middle class grew, however, many of the outer areas of the city began going through gentrification, and became residential neighbourhoods.
With the advent of more residences, the city government began placing restrictions on the movement of trucks and trailers that brought in the sugarcane to the factory. Many of the roads that had been used by the trucks were blocked off altogether for heavy traffic. As a result, the company’s logistics cost increased significantly, making it difficult for the mill to compete in the highly commoditised sugar market.
“With every passing crushing season, our mill’s financial health was going from bad to worse. We had no choice but to close down the unit permanently,” said Naveed Gulzar, a director at Crescent Sugar Mills.
But the higher transportation cost appears to be only one reason for the mill’s closure. Another, more compelling reason, appears to be the gentrification of the neighbourhood itself. The Crescent Group owns 150 acres in Nishatabad, with the sugar mill taking up 100 acres and a paper board mill (shut down about a decade ago) taking up the remaining land.
While both of these businesses were going through squeezed margins, the value of the real estate on which they were sitting was skyrocketing. At a certain point, it no longer made sense to manufacture low-margin commodities on prime residential real estate less than 10 minutes drive from the Faisalabad city centre.
And so the group has decided to shut down the factory, sell off the machinery, bulldoze the factory buildings and instead construct a residential colony, with all sorts of amenities, including a shopping mall, a hospital, schools, and colleges, said Gulzar.
The Crescent Group is not looking to exit the manufacturing business altogether but will no longer be in the sugar business. Instead, the board of directors has decided to open up a cotton spinning mill – that manufactures cotton yarn – for export. The factory, however, will be in a rural area, for which the group has already bought land.
“This land is too expensive to set up a factory here,” said Gulzar. “It is prime Faisalabad real estate.”
http://tribune.com.pk/story/434474/shifting-trends-economic-boom-shuts-down-faisalabads-oldest-sugar-mill/
Greetings... a bit about green housing tecknologies in pakistan http://eliteconstructions.pk/green-homes.html
THE EXPRESS TRIBUNE > BUSINESS
Pakistan's property boom is here, but is it here forever?
https://tribune.com.pk/story/1385594/property-boom-forever/
KARACHI: Everyone in Karachi believes that the safest and most lucrative investment is in the real estate sector these days since it provides the best returns with much less risk and effort.
That is why, every other day, housing schemes are being launched. It means that the property boom is here. But is it here forever? That’s the million-dollar question.
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It is true that per square metre prices in Karachi ($760.78) are much lower than average per square metre prices ($8,824.60) in the metropolitans.
However, we must realise that the fundamental value of a real estate investment is largely influenced by its rental value. Rent-to-price ratio in Karachi (0.54) is lower than the ratio of Dubai (0.83) only. Shanghai, Mumbai and Singapore have much lower rent-to-price ratios than Karachi.
This means that, on average, rents in Karachi have already peaked as a return on investment relative to other big cities. Furthermore, people in Karachi are already paying much more rent in comparison to their salaries.
Rent-to-salary ratio of Karachi (1.30) is only lower than the ratio of Mumbai (2.07) and Shanghai (1.88). Dubai and Singapore have lower rent-to-salary ratios.
This means that, on average, people in Karachi are paying too much rent in comparison to their income when compared with other big cities.
From Dubai back to Pakistan: the real estate investors’ journey
The only plausible reason for such high prices in Karachi is the burial of illicit money in the property market. Furthermore, tax avoidance also makes property investment a lucrative strategy.
A few changes in regulations (filer/non-filer issue) have been tried to curb the above two avenues. Otherwise, as per the rental yield analysis, fundamentals of property investment in Karachi seem very weak.
Naya Pakistan Housing Programme: 10 more cities to be part of scheme
https://www.thenews.com.pk/latest/381581-naya-pakistan-housing-programme-10-more-cities-to-be-part-of-scheme
The government has decided to extend `Apna Ghar Housing Scheme’ to 10 more cities of Punjab and applications for registration form submission will be collected for these cities in January 2019.
This scheme has been extended to more cities of the country to fulfill housing needs of the poor segments of the society and the government will leave no stone unturned to achieve the task of constructing five million houses, the sources in the Housing Ministry told APP here on Tuesday.
The sources said that it has been decided to extend Apna Ghar Housing Scheme in 10 more major cities and forms will be collected in the first month of nest year. The cities being included in the next projects are Lahore, Multan, Rahim Yar Khan, Layyah, Bahawalpur, Vehari, Kasur, Sialkot, Jhelum and Gujranwala.
It is to mention that 5 million houses would be constructed under this scheme while first phase of the project was announced for seven cities which include Islamabad, Sukkar, Gilgit, Muzaffarabad, Quetta, Swat and Faisalabad.
Federal Housing Taskforce and the government of Punjab have completed the initial preparations for the project while registration forms of the scheme are available on website of NADRA while it can be obtained from District Housing Program Office from October 22, 2018 for the first phase.
The scheme’s pilot project in various cities is currently underway and people would be greatly benefitted from this scheme besides economic boom in the country, the sources maintained.
#Egyptian billionaire Naguib Sawiris offers to build 100,000 housing units in #Pakistan as part of #PMImranKhan’s Naya Pakistan #housing initiative. http://www.arabnews.pk/node/1437706/pakistan
Egyptian billionaire Naguib Sawiris has offered to build 100,000 housing units in Pakistan to help realize Prime Minister Imran Khan’s dream of an ‘ambitious’ housing project, officials said on Friday.
“Naguib Sawiris has expressed his will to invest in 100,000 units of affordable housing to help prime minister (Imran Khan) in his vision toward Pakistan,” Tarek Hamdy, Chief Executive officer of Elite Estates — a partnership between Ora Developer and Saif Holding — told Arab News in an exclusive interview.
Owned by Sawiris, Ora Developers is already engaged in the construction of a multibillion-dollar housing scheme named ‘Eighteen’ which was launched in 2017 in Islamabad with local partners, Saif Group and Kohistan Builders.
Sawiris’ first investment in Pakistan was in Mobilink, a cellular operator.
PM Khan in October 2018 had launched ‘Naya’ (New) Pakistan Housing Project in line with his party’s election manifesto, which promised fivr million houses for the poor.
Hamdy says they have “set rules or guidelines of the way of doing things” that apply to every real estate projects — whether they are affordable or high value units.
“We will use our experience and knowhow to deliver this properly to the people of Pakistan,” he added.
Since the announcement of the low-cost housing project for the poor, the scheme has been at the heart of all political and economic discourses with several calling it too ambitious.
“This scheme is very ambitious yet very promising for the people of Pakistan. I think all the developers should help in this scheme. You cannot solely rely on the government to build five million houses,” Hamdy said.
Recently, the governor of Pakistan’s central bank had said that the massive housing project would require financing of upto Rs 17 trillion.
Hamdy believes that the promise of building five million affordable housing units cannot be realized in a short span of time. “I think the plan is right but it has to be in stages, has to be in steps. It could be achievable obviously that is not the project (to be achieved) in one or two years... may take few good years, may be couple of decades to be achieved,” he said.
In the Islamabad project the Ora Developers own a 60 percent stake in the project comprising a five-star hotel, 1,068 housing units, 921 residential apartments, business parks, hospitals, schools and other educational facilities and 13 office buildings, and a golf course. The networth of the project is $2 billion.
The next cities on the radar for real estate projects are Lahore, Karachi, and Faisalabad. “We intend to do more, we intend to invest more. I think that our portfolio of real estate could come to $10 billion worth of investments in the next five to 10 years including all the projects that we intent to do,” Hamdy said.
Pakistan’s housing sector is marred by frauds, scams and unfinished schemes which has been discouraging many potential investors from venturing into the sector. However, Hamdy says he is confident of delivering the promise by 2021.
Analysts say that Pakistan’s housing sector offers great opportunities for investment due to increasing demand. “According to estimates, the current real estate market value is around Rs900 billion which is three times that of the GDP,” Saad Hashmey, an analyst at Topline Securities, told Arab News, adding that the PM’s housing project is the need of the hour.
Pakistan faces a shortage of nearly 12 million housing units that may require a massive investment of around $180 billion, according to the former Chairman of the Association of Builders and Developers, Arif Yousuf Jeewa.
#Egyptian billionaire Naguib Sawiris offers to build 100,000 housing units in #Pakistan as part of #PMImranKhan’s Naya Pakistan #housing initiative. http://www.arabnews.pk/node/1437706/pakistan
Pakistan expects to attract more than $40 billion foreign direct investment in the next five years in oil refining, petrochemical, mining, renewable energy, and real estate sectors. “We estimate that roughly around $40 billion investment will be made by three countries (Saudi Arabia, the UAE, and China) during the next three to five years,” Pakistan Board of Investment BoI chief, Haroon Sharif had told Arab News earlier, adding that “the investment would start materializing within the next two years”.
#NayaPakistan #Housing to build five million new houses kick-started in #Quetta, #Islamabad, and #Faisalabad. The project is underway at seven locations in #Pakistan, says #ImranKhanPrimeMinister's adviser Anil Mussrrat. shortly. Private investors to join. https://www.thenews.com.pk/latest/487621-pms-housing-project-underway-in-different-cities-pms-adviser-aneel-musarrat
Pakistan suffered at the hands of corruption and irregularities over the span of last ten years and it will require time to set it right, said Chaudhry Aneel Musarrat, Prime Minister Imran Khan's adviser and friend.
“The last ten years witnessed high incidence of mismanagement, poor decisions and wastage of national money,” he told Geo News. “It will require time to repair such a massive backlog. Had the PTI-led government not aggressively controlled over such malpractices, the situation would have gone far worse.”
The PM’s adviser also informed that Prime Minister Imran’s Naya Pakistan Housing scheme for five million houses has already been kick-started in different cities of Pakistan, including Quetta, Islamabad, and Faisalabad. The project is underway on seven locations in Pakistan, he pointed out, adding private developers also are going to contribute shortly.
He said the government’s foremost responsibility is to follow through the process of eliminating corruption and keeping up the accountability. “Khan Sahib said he will abolish corruption from Pakistan. Now, the corrupt people are being subjected to accountability,” he said.
The pilferage and robbery of the national coffers will come to an end, he added.
Musarrat also lauded the services rendered by the Pakistan’s armed forces. Services of the armed forces are highly commendable, as they have laid down their lives to fortify the country’s defence, he remarked.
The Pakistan Army is one of the best institutions in the world and we should thank God that they have curbed extremism and terrorism in the country, he pointed out.
CONSTRUCTION INDUSTRY
Housing & Construction Industry of Pakistan
Housing & Construction Sector is among the identified sectors by the Government of Pakistan as the driver of economical growth. A spurt in activity in this sector unleashes a chain reaction in other allied industries. It is also said that no less than 60 industries are linked to construction & housing sector.
https://www.buildasia.net/page.php?id=143
Investment Potential in Housing Sector
There is an annual shortfall of 270,000 housing units at present while the backlog of around 7.0 million units is in addition. The Prime Minister has issued a number of policy guidelines under “HOUSING FOR ALL” program for launching housing schemes for Government employees & provision of infrastructure to the housing development schemes. The Government has identified housing and construction as one of the major drivers of growth and has undertaken a number of measures to give impetus to this Sector which have helped reviving construction activities in the Country. Some of these include:
â–ª Significant reduction in duties and taxes on import of building materials including steel & its products, Construction Machinery & Equipment
â–ª Removing uncertainties from the real estate market by computerizing ownership documents
â–ª Free Trade Agreement between Pakistan & China.
Huge investments are pouring in from international investors from UAE, Singapore, Malaysia, China etc. who have committed for US$ 43 billion on two islands of Bin Qasim, US$68 billion on a New City Project in Hawksbay, Karachi and are also executing mega housing projects in Lahore, Gwadar, Mangla & DHA Karachi and Islamabad. The new home financing schemes by local and foreign leasing and financial institutions, through aggressive marketing, are playing an important role for the growth in this sector. Also, there are numerous infrastructure development projects in progress in the Country that include a large number of flyovers, underpasses, highways, tunnels, dams, roads and industrial projects which have lead this industry to surpass its past status and glory.
Ideal Investment Opportunities for Overseas Entrepreneurs to develop infrastructure
Every big city of Pakistan solicits Mass Transit System. The roads, highways and motorways all over the Country, specifically from Gwadar to Central Asian Republic Countries is another sector for investment on BOT basis. The Government is looking forward for investors to build these on BOT, BLT, BOOT basis. Overseas Entrepreneurs have ideal opportunities to make joint ventures with Pakistani entrepreneurs to invest in these projects on turnkey basis for very lucrative returns.
Furniture Industry - another potential sector for investment
Government plans to set up a Sector Development Company on the recommendations of the Furniture Strategy Working Group “SWOG” to boost furniture industry. At present, quality furniture is being produced mainly at Chiniot, Gujrat, Peshawar, Rawalpindi and Karachi. Pakistan has the potential to export US$1 billion worth of furniture annually in the international market. Pakistan’s furniture industry can be transformed from cottage to a modern industry through training, upgrading supplies and imports, setting up a woodworking institute including testing labs of international standards in Pakistan.
#Pakistan's barefoot architect Yasmeen Lari is developing agile #construction techniques for low cost, zero carbon and zero waste #housing with materials like bamboo, mud and lime and testing her prototype on a shaking table at NED University in #Karachi. https://www.theguardian.com/artanddesign/2020/apr/01/yasmeen-lari-pakistan-architect-first-female-jane-drew?CMP=share_btn_tw
A mirrored glass ziggurat stands on a corner in central Karachi, flanked by a pair of polished granite towers. Golden bubble elevators glide up and down behind the tinted windows, shuttling oil executives to their offices through the sparkling five-storey atrium. The Pakistan State Oil House is a power-dressed monument to the petroleum-fuelled excesses of the early 1990s, oozing ostentation from every gilded surface – so it comes as a surprise to learn that its architect is now building mud huts for the poor.
“I feel like I am atoning for some of what I did,” says Yasmeen Lari with an embarrassed chuckle. “I was a ‘starchitect’ for 36 years, but then my egotistical journey had to come to an end. It’s not only the right of the elite to have good design.”
The 79-year-old architect was awarded the prestigious Jane Drew prize in London in March, a gong that recognises women’s contribution to architecture, for her tireless humanitarian work over the last two decades. She joins an illustrious cast of previous winners, including Zaha Hadid, Denise Scott Brown and Liz Diller, but her career has been like no other, moving from glitzy corporate monuments to shelters built with the barest minimum of means.
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While international aid agencies busied themselves erecting costly prefab housing with concrete and galvanised iron sheets, Lari worked with dispossessed families to rebuild their homes using mud, stone, lime and wood from the surrounding debris. Working with volunteers, she trained local people how to use whatever materials were to hand to rebuild in a better, safer way.
“I think we often misunderstand what kind of help is needed,” she says. “As an outsider, you do things that you think are appropriate, but the reality here is different. The aid mindset is to think of everyone as helpless victims who need things done for them, but we have to help people to do things for themselves. There’s so much that can be done with what’s already there, using 10 times less money.”
She says that the process of co-creation can also be a crucial part of healing. “Disasters can be truly devastating and people easily fall into deep depression. But if you give them something to do, it really helps with recovery. Something people have helped to make is much more valued than something simply given.”
Since 2005, a sequence of further earthquakes, floods and conflicts have kept Lari and her team at the Heritage Foundation on their toes, developing agile techniques with bamboo, mud and lime, always following the principles of low cost, zero carbon and zero waste. Severe flooding in Khyber Pakhtunkhwa and Sindh provinces in 2010 saw them develop a design for modular community centres raised on stilts, which safely survived more floods a couple of years later.
When earthquakes hit Balochistan province in 2013 and Shangla in 2015, Lari designed shelters using a cross-braced bamboo framework, learned from the vernacular dhijji technique. Testing the prototype on a shaking table at NED University in Karachi, they found the structure was capable of withstanding an earthquake more than six times the strength of the 1995 Kobe disaster. If the homes ever did begin to crumble, they could be easily rebuilt using the same organic materials – unlike their concrete and steel counterparts.
#Pakistan PM #ImranKhan unveils Rs. 330 billion for low-cost #housing incentives, including down payment assistance, low-cost #mortgage financing and Sharia-compliant loans. Banks to set aside 5% of portfolios for mortgage lending. #NayaPakistanHousing https://tribune.com.pk/story/2254544/pm-imran-unveils-mortgage-financing-plan-to-revive-virus-hit-economy
Prime Minister Imran Khan has made another move to revive the coronavirus-hit economy with an initiative to promote the housing and construction sector with Rs330 billion of mortgage financing by the commercial banks in just 18 months.
The prime minister himself unveiled the plan for the revival of the construction sector after a maiden meeting of the newly formed National Coordination Committee on Housing and Construction on Friday.
Commenting on the government's initiative, a leading property developer and businessman Ejaz Gohar said that it was the first plan, which would make it affordable for the low and middle income people to build houses with mortgage financing of as low as 5 to 7% mark-up.
The commercial banks would allocate 5% of their portfolio amounting to Rs330 billion for the construction activities.
He noted that around Rs20 trillion was circulating in the informal unregistered economy and now was the opportunity for the people to get the huge amount of money declared by investing in the real estate sector by December 31, 2020.
Now a person with an income of Rs30,000 to Rs100,000 can build a house of 5-marla with the mortgage financing at 5% and that of 10-marla at 7% mark-up.
Gohar observed that mortgage financing started in the United States 82 years back to kick-start its economy. The government will give a subsidy of Rs30 billion for the construction of houses.
The prime minister has planned to hold meetings of the housing coordination committee every week to remove hurdles that come in the way as the country is far behind in terms of home mortgage financing as compared to the developed world.
As Covid-19 had hit hard the global economy, Pakistan too suffered a great deal due to the pandemic with rise in unemployment and shutting down of businesses, the government's measures for the construction sector would be a much needed timely relief.
Many economically strong countries like China, the United Kingdom, Italy and Spain were forced to impose strict lockdowns spread over months to contain the cases of Covid-19. However, economically fragile countries like Pakistan were caught in a dilemma as the option of complete lockdown was a recipe for disaster, especially for the vulnerable section of the society which comprised a significant portion of the country’s population.
Prime Minister Imran Khan – known for his leadership qualities since his cricketing days – went for a policy of smart lockdown, balancing the need to halt the spread of coronavirus and keep different sectors of the economy functional simultaneously.
The strategy largely worked and the primary sectors of economy are now open with the number of coronavirus cases after hitting the peak are lowering on a daily basis.
In order to deal with the adverse effects of Covid-19, the government had announced a relief package worth Rs1.2 trillion on March 24.
An important component of Pakistan's economic revival plan was the second phase of China Pakistan Economic Corridor (CPEC).
Despite hurdles, Pakistan and China went ahead with the second phase of the mega project during the last two years. After undertaking of the infrastructure, road and energy projects across Pakistan in the first phase, the focus was shifted to the building of eight special economic zones and socioeconomic and human development with the Chinese financial assistance of $1 billion.
The Pakistan Tehreek-e-Insaf government established the CPEC Authority and appointed Lt General (retd) Asim Saleem Bajwa as it head.
Bajwa set his sights on executing vital projects, including M8 motorway from Gwadar (Balochistan) to Ratodero (Sindh) and $230 million Gwadar international airport.
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