What will be the Future of Affordable Housing Schemes in Pakistan 2019

With the emergence of multiple low-cost housing schemes and residential units in various cities of the country, the real estate sector is multiplying tenfold in terms of property rates, legal documentation, financing, and taxation regulations. With a hike in property prices all across the nation, even affordable housing is not very affordable to put it accurately. With the boom in real estate market and the attempt by the newly elected government to provide economical residential plans and Naya Pakistan Housing Scheme (NPSH), the effect on investment is lulled and investors need a trigger of incentive higher than being currently offered by the State and property market.

Property values have been revised by an average 15–25pc that go up to 110pc in phase 7 and 8 of Defence Housing Society Authority in Karachi and 15-20pc in other areas of the city. Further hike in evaluation rates is expected next year to raise rates to 80pc of the market value from 60pc stipulated in the current revision. Although general housing finance has increased since last year to 89.79 billion from 89.18 bn the growth is negligible with zero effect on housing investment. To encounter the issue, the government has announced tax incentives for the financing of low-cost housing (LCH).The second mini-budget has proposed a cut in taxes from 35pc to 20pc on bank loans extended for LCH. Similarly, the State Bank had earlier announced a subsidized financing facility under which banks will be provided Rs1 million or 50pc of the loan amount at an interest rate of 1pc while the end borrowers will be charged at 5pc.

The task force on housing is also looking at proposals on how to make housing affordable for genuine buyers. It may recommend that the government ‘offer small plots, houses, and apartments at cheaper rates,’ says Mr Mohammad Hassan Bakhshi, chairman of the association of builders developers and a member of the task force on LCH.

Some of the low-cost localities include Al Kabir Town, Dream Housing Society, Al Jalil Gardens, Safari Gardens, Qasim Gardens, Al Ghani Gardens, New Lahore City, and  LDA City so much more. More projects are coming up that offer low budget plots to people so that they can have safe homes to live in. However, the renewed efforts of the Government to provide affordable housing under strict guidelines to execute the plan in a deadline ensures speedy implementation of medium to long term goals.

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