ISLAMABAD: With an estimated shortage of 14 million housing units in the country, the government is working on finalising an affordable package for 3- and 5-marla, interest rate subsidy and repayment period of 10 to 12 years in the upcoming budget.
However, the Prime Minister’s Office (PMO) is also working for extending this possible subsidy to 10-marla housing units for those constructing their first unit anywhere in the country. But the IMF might raise objection to it. There is possible cost of Rs50 to Rs70 billion as interest rate subsidy over the years for 3- and 5-marla but for 10 marlas, the cost will definitely go up.
The banking sector in the country has faced difficulties in mortgage financing and raised the issue of stay orders from courts at time of instalment of repayment of outstanding loans. Legal changes were made but there might be more procedural requirements creating a stumbling block in the way for promoting mortgage financing in Pakistan. In recent meetings on affordable housing in the country, the representatives of almost banks raised the issues of legal hitches in receiving outstanding instalments, so the Ministry of Law was consulted to resolve it before giving the big push to construction and housing sector.
There are around 30 million housing units of kacha/pakka in the country in accordance with the latest population census but there were no exact data of shortage of housing units in the country if analysed on the basis of decent housing requirements. The housing sector cannot flourish with patchwork and it requires a comprehensive framework with provision of legal backing, regulatory body with establishment of Housing Ombudsman/Mohatsib to protect the rights of consumers.
For public sector employees, the government can replicate the UK model as house finance can be availed after entering the public sector. In
Pakistan, housing loans are too little which cannot even buy a plot in major cities. There is a need for holistic approach to tackle the housing shortages in the country.
