The real estate business which had almost came to a
standstill three years ago when most of the developers and other
concerns had pulled down their shutters due to lack of interest of the
investors in the real estate business.
However, with the revival of the economy, the real
estate and the construction industry once again has come back on the
track which should be taken as an indicator reflecting the state of the
economy which is on the strides in Pakistan.
People who matter in the real estate and the
construction business say that the rise and fall in real estate is
associated with the rise and fall of the economy. It is the last sector
to succumb to the depressing economic pressures while it is the first
one to pick up as soon as the economy starts growing.
Although the real estate and the construction
industry has started showing signs of improvement which is reflected in
the growing demand and upward trend in prices, yet this sector was still
the victim of the bureaucratic chains impeding the desired level of
growth in this sector.
In fact, besides a large segment of the local
investors, the non-resident Pakistanis are keen to invest their home
remittances in the real estate sector as it the safest haven for
risk-free investment, which pays back handsome. The trend of investment
by non-resident Pakistanis has accelerated the demand which naturally
pushes up the prices. However, the increase in steel and cement prices
has also helped property prices to increase. According to an assessment,
the land prices in posh areas like Defense Housing Society, Clifton,
PECHS, Gulshan-e-Iqbal, Gulistan-e-Jauhar, and North Nazimabad have
registered an increase ranging from 70 percent to 50 percent.
Though the prices have not taken a jump in low lying
areas yet an upward trend is visible in the low income group areas as
well which is not a good sign from different angles. Actually, to keep
land prices at affordable level is a prerequisite to check over the
menace of slums (Katchi abadis) which not only disturb the supply of
essential services like electricity, gas and water but also contribute
in aggravating the crime rate in the society.
People living in a decent environment think thousand
times prior to indulge or commit a crime as against those who live in
slums have a little on stake to care for. Hence providing decent living
conditions greatly helps to eradicate anti-social activities from the
Actually, the housing sector in Pakistan offers great
opportunities for investors in view of the growing demand for new
housing units and a huge backlog of over 6 million houses required for
the shelter less in the country.
The banking system in the country has come in a big
way to offer house financing, yet the housing and the construction
sector could not produced the results as have been shown by the
automobile sector which the banking system is providing car financing
During the current financial year, while the auto
sector has registered an impressive 68 percent growth, the housing
sector has yet to gear up. Spelling out the reasons for comparatively
low growth in housing sector, a senior builder said that contrary to the
spirit of the housing scheme launched by the government, a large number
of plots allotted in the past on political considerations were freezed
to restrict all sort of construction activities. This ban seriously
affected the construction activity especially in the urban areas of
Sindh. The extremely complex system of getting No Objection Certificates
from utility organizations dealing in electricity, gas prior to
launching any housing and other construction project was again a major
hurdle. Now the government under the directives of President Pervez
Musharraf has done away with the NOC conditions for the builders while
construction activity on the frozen land is also expected to be allowed
The only area which needs immediate attention of the
government is the complicated procedure for allowing housing loans
especially to the low income group. As against the car financing scheme,
those seeking house building or purchase loans have to obtain NOCs from
a dozen government departments. There is an immediate need that
one-window facility should be provided to the people seeking loans for
housing. It is highly important that low income group should be allowed
access to banking system in the real sense. This would also contribute
significantly in meeting the targets of the poverty reduction program so
far visible in the headlines of the newspapers alone.
During the current financial year, the economy is
poised to hit an impressive 6 percent growth in the real GDP. No doubt,
it is a commendable performance, acknowledged internationally; however,
it is still lagging behind the actual depth of the economy.
The construction industry can do a magic by
multiplying the GDP growth provided a helping out culture is developed
especially in the banking system instead of discouraging people through
intricacies of highly complicated procedures. The construction activity
on one hand activate over 80 allied industries, while create economic
activity ever after completion of the building when inmates of the new
housing unit adorn it with the large number of household items
essentially required in a newly built house.