Karachi: Builders and developers have urged the upcoming government and the State Bank of Pakistan (SBP) to introduce an affordable financing scheme for middle and lower-middle income groups to facilitate their construction of houses on their own plots.
Previously, the federal government launched a mark-up subsidy for the Housing Finance scheme commonly known as ‘Mera Pakistan Mera Ghar (MPMG)’ in October 2020 as the government realised that the housing sector can play an important role in economic development by contributing in GDP growth, employment generation and social wellbeing. Further, more than 40 industries and 70 percent of unskilled labour are linked with the housing and construction sector.
However, the government’s Mark-up Subsidy Scheme for Housing Finance was suspended in June 2022 and now there is not a single affordable housing scheme for the middle class, while on the other side mark-up rate is at its peak due to tight monetary policy.
Syed Afzal Hameed, a real estate tycoon, said that the easy house financing scheme will not only reduce the housing deficit of the country, reaching over 1.4 million, but it will also revive economic activities across the country.
He said that creation of new job opportunities for the young generation will a major challenge for the newly setup government and it can handle this issue by lunching housing finance scheme that will generate hundreds of jobs in construction and its allied sectors, including cement, steel, wood, marble, pipe, and paint, through the development of the real estate and construction sectors. Besides, the government will receive handsome revenue through taxes in the national kitty, he added.
Hameed mentioned that the development work on various housing schemes is under way in different cities including Karachi, which is attracting a large number of people who wish to own an affordable housing unit. However, due to inflation and high construction costs, their wishes to develop their own housing units remained a distant dream.
The State Bank of Pakistan (SBP), in collaboration with commercial banks, provided loans to the tune of over Rs. 450 billion, including Rs. 235 billion in soft loans, under a subsidised financing scheme that included financing options for the construction of houses on plots and the purchase of the constructed housing units.
CEO Al Meeraj Marketing Kashan Siddiqui said the housing societies maintained high demand in metropolises among buyers because of their affordable payment plans rather than luxury apartments and bungalows.
He also urged the upcoming government to introduce a financing scheme for the construction of houses that will be available to those with no ownership of housing units within a certain income bracket; hence, their dividends from the bank scheme are transferred to a lower level through a well-planned residential society.
The commercial banks should collaborate with the housing society to facilitate the owners of the residential plots in building their homes through an affordable financing scheme. In this regard, the masses could also be encouraged to promote construction, he added.
Copyright Business Recorder, 2024