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KARACHI: More than 12 million houses are required across the country and the demand is rising due to negative growth in this sector.
Some banking experts said the liquidity coming out from banks due to falling interest rate is expected to enter the property market and this could stimulate growth in the housing and construction sector.
Builders and developers are, however, hopeful the housing sector will stimulate growth and more than 70 allied industries will generate employment as well as boost the economy.
“We presented our suggestions to Prime Minister Shehbaz Sharif. He appreciated the suggestions, but said he does not want only ‘files’ business. He is willing to accelerate the housing and construction sector for the benefit of low-income families,” said Hassan Bakhshi, Chairman of the Association of Builders and Developers (ABAD). He had attended a recent meeting with the prime minster.
“The prime minister has asked us to revise the suggestions and submit fresh ideas within 10 days. We hope the PM, who is eager to see the sector thriving, will finally endorse the suggestion,” he said.
Mr Bakhshi said even though the cement industry was functioning at 30 per cent of its capacity, prices in the country were half of those in the Middle East.
According to Hassan Bakhshi, long-term subsidised financing is required to revive the housing sector.
During the previous government, this initiative was taken and more than 31,000 houses were financed at subsidised fixed rates, he recalled.
But bankers say it was not possible for banks to come up with such heavy amounts and the builders say the government should take the responsibility to pay for higher interest rates.
Pakistan lacks mortgage financing, which enables an average person to buy a house and pay instalments equal to the rent earned from the property.
But bankers fear that long-term financing on such a large scale could be disastrous for business since the default risk is high in such cases. Since banks earn record profits through investing in risk-free government bonds, they are reluctant to take risks.
Published in Dawn, February 18th, 2025
