PM says 5 million houses ‘indeed ambitious target’

ISLAMABAD: Prime Minister Imran Khan on Tuesday acknowledged the implementation challenges in fulfillment of his promise to ensure five million low-cost houses in the next five years, but he said the government is determined to meet the housing shortfall.

“Providing five million houses in five years is, indeed, an ambitious target keeping in view the lack of necessary infrastructure and inefficient foreclosure laws due to which banks are reluctant to provide mortgage loans,” Khan said, addressing the Pakistan Housing Conference.

“However, government is fully determined to meet the existing demand of 10 million houses in the country for which it is working closely with the State Bank of Pakistan (SBP) and the World Bank to resolve implementation challenges.”

Pakistan Mortgage Refinancing Company (PMRC) signed agreements and memoranda of understanding involving Rs4.80 billion investments during the conference.

The agreements were signed to offer low income housing finance. They were signed in the presence of officials of the World Bank Group, the House Building Finance Company, Askari Commercial Bank, First Woman Bank, Bank Islami and Khushali Microfinance Bank.

World Bank Country Director Illango Patchamuthu said it takes around 25 years for an individual to own a house in Pakistan compared with five years in the international market.

Patchamuthu said the World Bank has made available $140 million of facilities for housing finance through PMRC. The bank’s country director applauded the performance of PMRC and indicated the World Bank’s further support to PMRC as the demand of PMRC funding is increasing.

Mudassir Khan, managing director of PMRC said the company is a joint initiative of the SBP, government and the World Bank Group established with the objectives of increasing affordable housing finance especially for the low and middle income groups, providing mortgage finance through banks, development finance institutions and housing finance companies and development of capital markets with fixed rate long-term bonds and sukuks.

Khan said PMRC is committed to support the initiative of providing five million low-cost houses and providing liquidity to financial institutions through refinancing. It has already disbursed Rs5.20 billion to three banks and a housing finance company for extending mortgage loans to the people.

PMRC started its commercial operations in November 2018 and within a very short period of time has created a unique position in the financial sector. The company is 51 percent owned by private commercial banks and 49 percent by the government. PMRC will soon launch its fixed rate bonds to generate further liquidity from capital markets.

“This will not only increase lending to financial institutions for further extending mortgage loans but also provide an alternate asset class for investors to reap attractive risk adjusted returns besides providing diversification benefits to their investment portfolios,” PMRC official added.