KARACHI, May 31: Federal Housing Minister Syed Safwanullah has said that his ministry has asked banks to provide housing finance to government employees at low and affordable rates.

He said that government employees could not afford to pay the current mark-up rates being offered at seven to eight per cent by banks and the House Building Finance Corporation (HBFC).

"If these rates can come down to 2.5 per cent these will be affordable and as such the repayment of loan would be guaranteed," the minister observed. Mr Safwanullah said that the government was working on a new housing scheme for government employees through which they could get a land and housing loans at affordable prices.

"We are negotiating with the HBFC and a few banks for obtaining housing loans at low mark-up rates as the large number of government employees would get these loans as bulk borrowers," he said.

He pointed out that the government had asked the chief ministers of all the provinces to identify at least 100 acres of lands for government employees. In this regard, he added, the chief minister of Punjab had demarcated the land while other provincial governments would soon identify 100 acres.

He was of the opinion that the country was facing a "severe shortage" of housing units and said the federal budget would have incentives to boost this sector, but, did not give details.

Mr Safwanullah said that the government had approached people in the Middle East to invest in housing sector in order to reduce the demand and supply gap in the country.

He said that investors from Saudi Arabia were expected to visit Pakistan to explore possibilities for investment in the construction and housing sector. "We are trying to create enabling environment for attracting foreign investment in the construction sector," he added.

He said that Islamic countries should invest in this sector to promote industrial activities with the block. The minister further said that construction industry had created a lot of jobs and given boost to at least 44 other industries in the last couple of years. -APP