Business & Finance Print edition: 2025-02-23

ABAD hoping for construction industry revival package

Published February 23, 2025 Updated February 23, 2025 02:53am

2 min

By Recorder Report

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LAHORE: Chairman ABAD North S M Nabeel has expressed hope that the federal government will soon announce a revival package for the construction industry to address challenges and drive sustainable development.

He extended gratitude to Prime Minister Shehbaz Sharif, Federal Finance Minister Muhammad Aurangzeb, and Federal Housing Minister Riaz Hussain Pirzada for their proactive role in revitalizing Pakistan’s housing sector. Nabeel praised the formation of a dedicated task force and highlighted ABAD’s proposals, including reducing withholding tax, eliminating Federal Excise Duty (FED), and introducing fixed-rate mortgages to attract investment and boost economic activity.

He urged banks to prioritize construction financing, highlighting that Pakistan has the lowest home mortgage-to-GDP ratio in the region. He emphasized the need for policies that expand financial accessibility and incentivize formal sector participation to stimulate real estate investment.

Nabeel believes the real estate sector holds a foreign direct investment potential of $100 billion, which could significantly boost economic growth. The construction and housing industry is the second-largest employer in Pakistan, playing a crucial role in economic stability. With 72 allied industries including cement, steel, bricks, paint, glass, and electrical equipment directly linked to it, a thriving construction sector can create millions of jobs and significantly boost GDP.

However, with construction costs reaching an all-time high in the last three years, homeownership has become increasingly difficult for the common man. Cement prices alone have surged from Rs. 500 to Rs. 1,350 per bag in the last four years, making it nearly impossible for many to build a home. Addressing these soaring costs is crucial for ensuring affordable housing.

Pakistan is currently facing a housing shortfall of 12 million homes, which needs urgent attention. ABAD has presented proposals to the Prime Minister for low-cost housing initiatives and fixed-term mortgage loans spanning 15 to 20 years with stable interest rates. These measures could make homeownership more accessible and drive long-term economic growth.

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