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‘SBP should provide credit for low-cost houses’: CEO Eden Builders - Naveed Yaseen - 08-01-2008 09:53 AM
KARACHI: In order to overcome the issues relating to lack of shelter in the country, the government should make policies and evolve a mechanism to facilitate the private sector in developing low-cost housing projects, Muhammad Arshad, CEO of Eden Builders said.
He was talking to media persons on the sidelines of the signing of the Rs2 billion financing facility with Meezan Bank here on Thursday. He said that major proportions of the homeless population are largely belonging to the low income segment of the society and emphasised that the State Bank of Pakistan (SBP) should also come up with a criteria for a credit line, keeping in mind the low income group of the society who can barely afford Rs1 million for purchasing a house in a single payment. He suggested that the interest in such loan facilities should be within the range of 4 to 5 per cent, as most of the other countries are providing housing loans to low income groups of the society at zero interest rate.
Arshad was confident that the government’s 10,00,000 housing schemes would not affect the private sector housing projects in viewing past discrepancies in government run projects, such as lack of transparency, political allotments and location of sites which ultimately caused the downfall of such projects.
“Real Estate Investment Trust (REIT) is a new concept in the region but Pakistan made very good progress in this regard,” he said while commenting on the impediments and the delay in the materialisation of REIT’s idea.
He said that REIT would ultimately help in the development of such housing projects which would help overcome the shortage of housing units in the country. He said that the Securities & Exchange Commission of Pakistan (SECP) was in the finalisation process of REIT’s regulations.
“Over regulation, duplication in registration with local bodies and SECP, seven per cent stamp duty and tax on rental income, are major impediments in the development of the housing sector,” he said, while spelling out the hindrances. He demanded that the government announce incentives to attract private entrepreneurs. He complained that the government was not providing a level playing field to local builders as compared to foreign real estate investors.
http://www.thenews.com.pk/daily_detail.asp?id=127421