A number of disclosures were made in an on-going training programme on housing held by the SBP and named as “SBP-IFC Housing Finance Training Programme.”

Housing sector has been a major target of governments, but they failed to boost this sector.

Previous government of Nawaz Sharif focused this sector, but failed to bring results. However, the Musharraf government got some results when the State Bank brought commercial banks in this field.

The State Bank said the involvement of commercial banks in the housing loans substantially reduced burden of housing loans on the House Building Finance Corporation.

The data provided by the State Bank showed that as of June 2007, total disbursements by all banks and DFIs for housing were to the tune of Rs116 billion.

And out of this, Rs76 billion was loaned by commercial banks and Rs40 billion by the HBFC.

The growth rate of housing loans was impressive, but it did not match the required number of houses in the country and still each year over half a million houses are required to be built.

The entry of commercial banks in the housing sector reduced the market share of HBFC.

The market share of the HBFC in 2002-03 was 89.5 per cent which was reduced to 34.2 per cent by FY07.

The growth in the housing loans for the fiscal 2004 was 24.8 per cent which increased to 56 per cent in the fiscal 2005. But it dropped to 38.2 per cent in the year 2006 and further slipped to 27.7 per cent in fiscal 2007.

Bankers have been reluctant against housing loans and have repeatedly been demanding effective laws for recovery of their investment in case of default.

Bankers said the lending for housing loans was still much lower than the potential of the sector and requirement of the industry.

They said mortgage lending which is just one per cent of the GDP is even lower than India where mortgage lending is three per cent of the GDP. It is 15pc in Chile and 65pc in the US). The housing deficit is estimated at six million.