Pakistan is facing shortfall of 6.5 million housing units and this backlog is increasing by 0.4 million annually



Apr 26 - May 09, 2004





To demonstrate to all concerned that the government was determined to boost the construction and housing industry, President General Pervez Musharraf himself presided over a meeting comprising representatives of construction industry, contractors, property developers and other stakeholders, to find out the irritants and hurdles impeding the desired level of expansion and to give boost to industry's high potential.

Addressing the meeting in Rawalpindi last week, the President urged all concerned to work together to achieve the common goal of boosting construction industry which would help improve the economy, provide jobs and reduce poverty. In fact it is one of the highest source of job creation, he remarked adding that a boost to construction and housing industry will benefit about fifty downstream industries. Because of this importance, this industry was on the priority is of the government. Inviting the participants to come out with their problems he assured them that the government will provide all the required facilitates and incentives.

The President heard the points of view of the participants and the difficulties and problems faced by them. A number of them also recommended some solutions. The representatives of developers named land acquisition, delayed provision of utility services and other problems as the key hurdles in the way of developing the housing sector at an accelerated pace. They suggested that there should be uniform building laws, and a reduction in the transfer fee of houses. They also called for issuance of NOCs by a single agency instead of several such bodies, elimination of discretionary powers of officials, a review of rent control ordinance and measures to reduce cost of construction machinery and raw material. Regarding land acquisition, they said there are certain genuine land developers but a large number of unscrupulous societies were creating problems by just purchasing the land and then selling the plots at a high premium.

Finance Minister Shaukat Aziz who was also present on the occasion said there was a shortage of hotels, office space, tourist resorts in different parts of the country. Referring to the coastline of Balochistan and the Gwadar port, he said tremendous opportunities existed for the builders and developers there. He said they could focus on such projects, which will create economic activities and job opportunities.

Pakistan is facing shortfall of 6.5 million housing units and this backlog is increasing by 0.4 million annually causing a grave concern for the people, particularly middle and lower classes as prices of built-up houses and land have gone out of their reach. Official sources said the government will announce fresh measures in the coming budget to give impetus to housing sector as it will not only provide shelter to the shelterless, which is basic need of the people but also gives boost to fifty allied industries in Pakistan. About 250,000 to 300,000 housing units are constructed annually but the demand is much higher particularly in cities and towns which are swelling at great pace. At present 0.7 million housing units are annually required to provide shelter to the people belonging to middle and lower classes. According to CDA Chairman the urban area of federal capital is short of 30,000 housing units.



The situation is turning from bad worse as the huge gap between supply and demand has sent prices of land and houses sky-high. Price of a small house of 200 yards in Islamabad is between the ranges of three lakh to five lakh rupees. There are other factors such as returning of Pakistani expatriates after 9/11, land mafia which does not want to develop housing schemes after acquiring land, complex legal and administrative procedures, high interest rates on loans, high cost of construction material, stamp duty and transfer fee which have shackled the construction sector.

The government did announce some measures in the current budget to boost construction sector but these remained fruitless and other factors overwhelmed these steps to great extent. The reduction of duty on cement and other construction material somewhat helped in lowering the prices. The cement manufacturing units are working at more than 100% capacity but for exports, particularly to Afghanistan. The domestic housing sector could not become beneficiary, the sources added.

The successive governments, civil and military both ignored this important sector of ceremony as it is considered to be the largest sector in respect of creating jobs and boosting general economy, a representative of Builders and Contractors Association in Islamabad said. Fifty allied industries such as coal, furniture, electrical appliances, wood, pipes, cement, iron bars, bricks and rock crushing, tiles, etc can be given impetus through this sector, he said.

The Great Repression of 30s in the United States was tackled to some extent by boosting housing sector and building new cities. In Pakistan, the government has to come in a big way by removing all obstacles through revolutionary steps, the representative said.

In view of the gravity of the situation, President Pervez Musharraf summoned a high level meeting to discuss the issue threadbare. Federal Minister for Finance, Governor State Bank, Chief Ministers and Provincial Ministers concerned, heads of financial institutions and high officials and representatives of builders, developers and contractors gave their suggestions to improve the situation. It was suggested to formulate uniform building laws, simplify procedures and review of Rent Control Ordinance. The President directed to remove all obstacles in the way of boosting the housing sector. Chief Ministers were asked to hold meetings in their respective provinces to simplify rules and regulations and reduction in various duties. As a follow up, Punjab Chief Minister also hold a meeting and decided to set up a high level committee under the chairmanship of Minister of Law, Muhammad Basharat Raja to review the matters relating to tenancy law, property tax and stamp duty. Representatives from private sector will also be members of the committee. Similar meetings will shortly held by the Chief Ministers of Sindh, NWFP and Balochistan.