Investment in low-income housing would bring massive economic benefits to Pakistan, says a new study released by Karandaaz Pakistan and funded by the UK government's Department for International Development (DFID). The study "Enhancing Builder Finance in Pakistan" was launched here at an event. With this study, Karandaaz Pakistan aims to show the wide benefits to Pakistan of building more affordable housing, but also helps boost the businesses of small and medium enterprises (SMEs) that work on house building.
The study estimates that the construction of 100,000 more houses each year will lead to economic growth as well as increase employment opportunities. According to the study, Pakistan's economy will benefit massively if affordable housing is to be increased. To achieve this, improvements should be made to the regulatory environment for builders and banks must be given sufficient incentives for mortgage and builder financing.
Head of DFID Pakistan, Joanna Reid said that only the richest of companies can afford to build homes for the richest of people. Pakistan needs financing mechanisms to ensure everyone can have a roof over their head.
Speaking on the occasion, CEO Karandaaz, Ali Sarfraz said that it is important for such discussions to be given a platform and for players within both the construction and the banking community to come together and engage in a conversation on how the challenges in access to finance, especially for small and medium sized builders and developers, can be resolved.
"We hope that this study motivates members from the financial sector to take steps in making available financial products better suited to the needs and asset base of SME builders and developers and thereby catalysing the availability of affordable housing for everyone in Pakistan," he added.
Chairman Prime Minister's Task Force on Housing, Zaigham Mahmood Rizvi said that according to the UN-Habitat, more than half of the humanity now lives in the cities and by 2050, three out of four people will be living in the urban areas. This massive urbanisation in most of the cities of Asia Pacific is creating challenges in major metropolitans like Mumbai, Calcutta, Karachi, Manila, Dhaka, etc.
The urban areas, more so major metropolitan cities, are facing housing shortages and generating urban slums, illegal habitats and indecent housing. The stakeholders of housing, namely developer, planners, the governments, fiscal and regulatory agencies all are needed to be engaged to address affordable housing challenges, both from its supply-side and finance-side parameters. The supply-side players, mainly the developers/builders, need to be engaged for meeting this challenge of affordable housing. In turn, this will boost the economy and create jobs. Housing and real estate sector is directly linked to about 42 construction materials' industries and creates jobs at much higher rate.
"I reckon that with the government's focus and assistance from partners such as Karandaaz, the growth of SMEs in building and construction sector will bolster the positive impact at the macro level." The state and the private sector should come forward to compliment and support efforts of platforms like Karandaaz, he added.
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