KARACHI: For the first time, completely built houses and apartments will be sold by the private sector allowing buyers to pay back in instalments while residing in these units, chief of Pakistan Mortgage Refinance Company (PMRC) said on Saturday.

The model has been adopted in collaboration with private sector builders and developers, said PMRC Managing Director and CEO Mudassir H. Khan, adding that the government will also build 5 million units under the same model.

Traditionally, private sector constructs houses with buyers’ money and takes minimum 4 to 8 years to give possession to buyers.

“The biggest benefit for a buyer under this new model is that he/she will pay what he or she has been paying as rent. The installments could be slightly higher or even lower than a house rent; it depends on area and the size of houses and apartments,” Khan said.

“Another big step is that the PMRC has decided to cover risk up to 40 per cent in case of default,” he added.

The company gets loans from the World Bank and lends it to banks which provide credit for housing projects at cheaper rates to the purchaser.

Pakistan has a serious problem of housing shortage. There is a need for 10 million houses while the gap has been increasing with an additional requirement of about 250,000 houses each year.

“We are in the advance stage to finalise this model with the private sector,” he said.

The PMRC provided Rs8 billion to banks and House Building Finance Corporation (HBFC) in 2019 to promote house building in the country.

“We will provide an additional Rs10bn during this calendar year and will continue to increase the amount for housing projects,” he said.

The latest quarterly report of the State Bank’s Housing Finance Reviews shows that the disbursement during the quarter July-Sept 2019 was Rs4.25bn which was lower than previous quarter April-June 2019 of Rs6bn.

However, the overall growth in the housing sector during the year significantly improved. During July-Sept 2018 the total housing finance was Rs89.79bn which increased by Rs13.6bn to Rs103.4bn up to July-Sept 2019.

Both the State Bank and the federal government have been trying to promote housing in the country that may push the entire 42 sectors allied with the housing but the overall situation remained depressive particularly due to massive increase the cost of lands and constructions along with increasing requirement of houses in the country.

Published in Dawn, February 2nd, 2020