A new game changer in town!
And you thought the China-Pakistan Economic Corridor is the only game changer in town. Think again! For a housing boom is waiting to happen, if and when the Finance Minister Ishaq Dar decides to go ahead and announce the much delayed housing policy.
In mid 2013, Dar had set up a steering committee under his chairmanship. The committee was divided into five working groups tasked to address different issues related to housing such as low-income housing, land supply, foreclosures, tenancy laws, property titles, and other legal issues. They also looked at developers and development finance.
By October 2013, each of those working groups prepared five different reports, which, according to experts in the know are “some of the finest policy frameworks.” The draft National Housing Policy 2013-2018 with primary focus on PM’s low income affordable housing programme was prepared way back in December 2013, and it’s difficult to fathom why the latest national housing policy has been catching dust in government offices since December 2013.
This column plans to share the broad contours of the policy over time but it is worth pointing out that a housing boom can trigger a fresh wave of GDP growth in the country by kicking off opportunities in construction, financial and a host of housing and allied industries.
Construction and housing sector has forward and backward linkages with around 40 big and small industries. Any growth in this industry can help to boost significant revenues for the government, create employment especially to the unskilled labour, and of course, in the case of low income housing, provide shelter to the shelter-less.
The recent spate of corporate activity also points in the same direction, perhaps because smart money has already gotten a whiff of things.
DGKC has already announced expansion with a new plant in Hub, Balochistan, and a BR Genie tells us that Lucky Cement is also considering capacity expansion in the country’s south with the expansion possibly being financed by the selling of American Depositary Receipts (ADR).
Earlier this year, Mughal Steel had issued an IPO for BMR and to purchase new furnaces, whereas Amerli Steel and Agha Steel are also soon expected to come up with an IPO to finance their expansions/BMR. The latter’s IPO is reportedly in very early stage, but the former, according to a Bloomberg story, is seen raising up to Rs4 billion from the sale of 70 million shares.
At the other end of the spectrum, housing has also become the buzz word in Islamabad’s policy community. Weeks after the Islamabad-based think tank PRIME published its policy paper on ‘low income housing through markets’, the central bank hosted a two-day international conference on housing and mortgage finance last week. Sources say that the central bank has also nudged banks to quickly develop conventional and Islamic mortgage products to kick-off housing boom.
But be that as it may, these private sector efforts and hopes of housing-led GDP growth would only see the light of the day, if and only if the government chooses to announce and implement the policy, and its offices really start facilitating the industry thereafter.
