Check on real estate price speculation: business community hails SBP decision

Business community has welcomed the decision of the State Bank of Pakistan (SBP), restraining the banks from providing loans exclusively for the purchase of land and plots.
Lahore Chamber of Commerce and Industry (LCCI) President Mian Misbah-ur-Rehman, Senior Vice-President Sohail Lashari and Vice-President Sheikh Mohammad Arshad in their statement lauded this decision and said that it would go a long way, as on one hand it would curb speculation in real estate and on the other expedite process of industrialisation in the country.
According to SBP circular, 'the banks and DFIs will not allow housing finance purely for the purchase of land/plot; rather, such financing would be extended for purchase of land/plot and construction on it.'
The LCCI office-bearers said that for the last many months, the boom in real estate business has put the other businesses in trouble as the people were more interested in investing in real estate business for speedy gains while spoiling the otherwise conducive business atmosphere.
The LCCI President Mian Misbah-ur-Rehman said that the State Bank has taken a right step in right direction at appropriate time, as now the people would divert their money towards industrialisation, which would check the rate of unemployment from the country on the one hand while it would bring prosperity on the other.
Senior Vice-President Sohail Lashari and Vice-President Sheikh Arshad hoped that after SBP's decision, the people would plough back their money in other businesses and as a result the national exchequer would get more money in shape of taxes and duties.
Moreover, Pakistan Industrial and Traders Associations Front (Piaf) Vice-Chairman, Mubashar Sheikh said that ban on extending loans exclusively for land and plots and conditioning loan with construction of house is a very appreciable step.
In a statement, Mubashar said that investment in land or plots only benefit one person. People invest in land and keep it for long to make more profit but it had picked prices to a point where construction of house for a common man had become very difficult.
Appreciating this decision he said that process for issuance of loans for industrial purpose should be simplified apart from lowering the mark up rate. He said that prosperity would come only through promoting business activities for which industrial process should be expedited, as it would also help combating the biggest problem of unemployment.