Housing for the unprivileged commendable.

• Author: Ahmed, Khalil

Byline: Khalil Ahmed

More than 70% of the total world population would be living in the urban areas by 2050. This calls for a dramatic change in the policies for house financing throughout the world. Pakistan is no exception in this regard.

Immediately after assuming power back in 2018, the PTI-led incumbent government commenced making concerted efforts to promote the housing sector in line with its manifesto of building 10 million units focusing primarily the unprivileged stratum of the society which has been neglected hitherto. The recent development of revising downward the markup rates for housing subsidy scheme is admirable since the subsidized markup for financing for one to five-year tenor will now be 2% vis-a-vis 3%, for six to 10 years will be 4% vis-a-vis 5% and for 11 to 15 years will be charged at 5% vis-a-vis KIBOR plus 250 basis points for 15 to 20 years. The financing under the Mera Pakistan Mera Ghar (MPMG) seems to gather momentum as in 2021 with the approvals to the tune of Rs117 billion. There are signs of the construction industry making headway ever since this scheme was launched even when the cement and steel prices have spiked unduly. The incumbent prime minister lauded the construction industry during a recent event saying the construction industry was the driving force of the country's economy since 30 more allied industries thrive when there is growth in the construction industry.

Circumstances in our country are a far cry from the other countries. Housing is deemed a basic need for every citizen in the western world and all efforts are made to ensure the financing facility for all and sundry. Mortgage financing in the US and Europe is at around 80% whereas it is abysmal less than half a percent to the GDP ratio in Pakistan. When compared with even our South Asian counterparts, one would be amazed to know that it is 3.4% in South Asia. Pakistan lags behind in this regard since ages. No concrete steps have ever been taken which has resulted in the housing backlog of around ten million in Pakistan at this juncture.

There is no denying the fact that banks in Pakistan have traditionally...