Real estate blooms as crime plunges low

KARACHI: The improved law and order situation in the city has enhanced property value, and new constructions projects have been announced. In the last six to eight months, almost 25-30 new projects worth Rs100 billion have been announced in troubled areas, said Junaid Ashraf Taloo, Chairman Association of Builders and Developers of Pakistan (ABAD), while talking to The News. Each project is not less than rupees one billion.
The areas that suffered from the poor law and order situation include North Karachi, Surjani Town, Scheme 33, Scheme 41 and 42, Gulshan-e-Maymar, Gulistan-e- Johar, and Gulshan-e-Iqbal, as well as 65 percent of the real estate in the city.
The slight betterment of the law and order situation has enhanced land value by 35 percent on average and 10 percent in previously affected areas.
Taloo credited the law enforcement agencies for decreasing the crime rate in the city, which bodes well for the previously disturbed areas in the metropolis. The normalisation has led to better property prices and hike in demand for real estate.
The housing projects, which were shelved due to the disturbed law and order, have been restarted, and if peace persists in the city, the property sector is expected to further go up by 50 percent in the coming years.
Taloo said that at present, more than 40 projects which were halted in different parts of the city have been started again.
Also, since the beginning of the targeted operation, demand has increased and the prices are expected to improve further, he added.
Lawlessness has been a major issue in stopping the flow of investment in this sector.
“Disturbed law and order directly impact the property sector,” ABAD chairman said. Increase in construction activities would only result in the revival of the national economy, as over 70 allied industries benefit from this. Resultantly the government also receives sizeable revenue through construction activities, he added.
The construction industry employs over 120 million people directly or indirectly.
Taloo said that ABAD was practically involved in the Prime Minister’s Vision 2025 for housing, according to which 500,000 houses will be built annually. The overall shortage of housing units has reached 8.8 million.
Speaking of the financial bottlenecks in the low-cost housing sector, the ABAD chairman said that though all the work had been done by the stakeholders, the matter is in limbo due to financial issues.
He asked the government to formulate a policy for mortgage financing in order to overcome the housing shortage prevalent in the country.
Taloo said, “We have persuaded House Building Finance Corporation (HBFC) to provide housing loans in the lower income group areas as well as the middle income group areas, which was not being done by the HBFC previously.”
The HBFC has agreed with the suggestion given by ABAD and is now providing the loans in lower and middle income areas. All the projects launched recently in the low and middle income localities are being financed by the HPFC.
ABAD chairman said that the builders and developers association has persuaded the Sindh government to rehabilitate katchi abadis vertically, and it has approved an ordinance in this regard. However, no progress has been made on it since the ordinance was passed.