Call to freeze housing finance to single digit

[Lahore_Real_Estate]

LAHORE: The government must freeze the housing sector finance for at least 10 years into single digit to promote the construction industry and to meet the country’s housing demands.

Participants in the Jang Economic Session on the ‘Role of Housing Sector in National Economy’ added the country needs 0.5 million units per annum and only 0.2 million houses were being constructed. The moot was held here on Tuesday.

The participants were Habib Ahmed, MD Habib Rafiq Group, Chairman Punjab Land Development Company (PLDC) Sheikh Allauddin, Engineer Akbar Sheikh Zamin, developer Mian Tahir Javeed, Chairman Urban Developers Irfan Qaiser Sheikh, former Chairman PIAF and Main Fazal Ahmed, President Engineers Study Forum. The session was jointly hosted by Sikindar Hameed Lodhi and Intikhab Tariq.

Habib Ahmed said construction industry ran 40 other industries at parallel, which created real economic activity in the country. He stressed the need to promote vertical housing construction, which was relatively cheaper as compared to traditional housing units. He called for the implementation of Housing Policy 2001 approved by the cabinet. He also suggested introduction of modern technology in housing construction, which was used all over the world, which was also helpful in promoting the construction industry. He said the government developed mortgage industry as well, with at least 10 to 15 years single digit frozen mark-up rate.

Sheikh Allauddin said that there was no urban limits of Lahore. One developer made a housing scheme 60-km away from Lahore with a golf course and was calling it as within Lahore. He said if the government was sincere in giving houses to common man, then it must provide subsidies on constriction material. He said the government also introduced rules of constructing a house on a plot within a specific time period after which fine would be imposed on the plot holders. He said the PLDC has shifted the location of the Aashyana project while new applications would also be invited before balloting while over 19,000 applications were received. He said similar low cost housing projects would also be introduced in Jehlum, Sargodha and Faisalabad after completion of the Lahore project.

Akbar Sheikh said there was no department and database about the housing sector of Pakistan. He said the government collected up to 30 per cent revenue from construction spending and this construction industry was a cash cow for it. He said no developer was bringing any product for Rs 15,000 to 20,000 monthly income group people who could only pay maximum Rs 8,000 monthly for their housing unit. He said low cost housing projects were also not commercially sustainable in the absence of low mark-up rate housing finance in the country.

Mian Tahir Javeed said 80 per cent housing societies were developing without planning and approval of the authorities concerned, which caused problems for the government. He said these societies were developed without basic amenities of sewerage, water, electricity, gas and others due to which government expenses to provide facilities to public increased. He said the approved scheme developers paid for every amenity to the government due to which the cost of the price of land and housing units was unmatchable with unapproved societies. He said India had zero rated the housing sector for four years while in many parts of the western world zero rated financing facilities were available to it. He said construction cost was increased quickly in Pakistan and the government must develop a mechanism to control it for promotion of construction industry.

Irfan Qaiser said that world over, the housing sector was an indicator of growth and also played a vital role in economic growth. He said the construction sector not only creates job in developing and under developed economies but also in developed countries. He said monthly earning of both skill and unskilled labour construction industry could be doubled by providing with 6 to 12 months technical crash courses. He said reducing the anti dumping duties from the construction industry raw material could also promote this sector as locally produced raw material was costlier then the imported one. He said the government should promote vertical housing culture as in Singapore 81 per cent housing need was catered through apartments.

Mian Fazal Ahmed said that the government revisits the national housing policy according to modern needs and implements it as well. He said modernization of housing and construction sector could bring down the poverty and unemployment from country. He suggested Malaysian model.