Minister suggests 65pc increase in house rent ceiling

ISLAMABAD: Federal minister for housing and works Akram Khan Durrani said on Thursday that he has recommended to the government to increase the house rent ceiling of public sector employees by 65 percent in the upcoming budget 2015-16.
“I had recommended 100 per cent raise in house rent ceiling last year but the government increased it by 35 percent so I have now asked for 65 per cent hike in the the upcoming budget,” the minister said while addressing inaugural session on international conference on affordable housing and mortgage finance organised by State Bank of Pakistan (SBP) here on Thursday.
The experts revealed that by improving four levers - availability of land, development, operation and maintenance and financing - the cost of housing unit could be reduced in the range of 20 to 50 percent in Pakistan.The minister said that the government would construct desired number of housing units under PM’s Apna Ghar Scheme till 2018.
In his message to the conference Prime Minister Nawaz Sharif said: ‘Pakistan is currently confronting a massive challenge of housing backlog of around 9 million units, of which a large part pertains to the economically disadvantage families and members of the lower middle class. This, coupled with a weak governance regime of urban civic institutions, has resulted in the mushroom growth of katchi abadies and slums/squatter settlements in major metropolitan areas.
In line with the manifesto of PML (N), our government is fully committed to resolving the issue of housing shortage in the country particularly for the low-income groups. It has announced a comprehensive housing finance scheme, which includes construction of 1000 clusters of 500 houses each for low-income families all over the country. To ensure cost-effective access to credit for housing, the government has undertaken to pick up a portion of the cost of financing on behalf of the borrower over and above 8 percent under this programme’.
Governor State Bank of Pakistan, Ashraf Mahmood Wathra, in his policy address shared SBP’s policy framework for enhancing the flow of financial services to middle and low-income groups. While asserting the importance of housing and housing finance for the economy, he said that the country is witnessing rapid urbanisation and escalation in property prices with
increasing shortage of housing units, especially for low and middle income groups. In the absence of a sound and vibrant housing finance system, we can expect the situation to further deteriorate. He appreciated DFID, World Bank, AFG and CSAPs for their support in SBP/Mof efforts to improve upon financial inclusion in the country.
Earlier, Mr. Saeed Ahmad, deputy governor, State Bank of Pakistan in his welcome address highlighted the importance of housing and housing finance for the long-term sustainable economic growth. He stated that in Pakistan house financing is less than 1/2 percent of GDP, which is one of the lowest in the world. ‘We have currently 9 million units shortfall. Each year there is need for 600,000 units but only 300,000 units are constructed. In order to increase housing finance to 10 percent of GDP over next 10 years we have to finance some 300,000 units per year. He stressed upon the need of bringing innovation in the existing system and increasing the outreach of the housing finance to low and middle-income groups.