There are two school of thoughts as to why housing costs in many parts of Pakistan are high. According to one group, the housing sector is expensive because since the inception of Pakistan, the governments have not adopted restricted land utilization frameworks where restrictions can be put in place to limit the cost of land for housing purpose and through this way the prices of plots cannot be escalated. Additionally, because of government weak and ineffective laws, the housing business quickly devouring Pakistan’s agricultural lands and it could have cascading effects on the country’s food security in years to come.
A United Nations Development Programme (UNDP) report is an eye-opener because it revealed that Pakistan has the highest urbanization rate in South Asia. Current government vision to promote vertical growth of the cities will surely help to protect agricultural land but this need to be materialized on ground not just on paper.
On the other hand, people contend that housing is become an expensive business because of corrupt land mafia people are gentrifying this sector with their own design and wishes and corrupt bureaucracy assist and help these people to achieve their malicious goals, which in turn results in disappointment and fear of civil society in investing their hard earn money.
Simply, whatsoever reasons, the houses are expensive in Pakistan. However, providing transparent housing finance to legitimate people is a critical determinant for every government in power, so is with PTI government. A transparent and easy housing finance mechanisms is a key driver to bring socio- economic revolution in our country. One of the wise ways to introduce good housing finance mechanisms is to study success models of different industrialized countries, such as China. Due to market-oriented housing reforms, China has experienced fast economic development. In 2000, the proportion of added value in GDP was 2%, which after reforms became 6% in 2011. Moreover, due to sustainable growth in real estate sector, the GDP share of China rose to 7% in 2019. However, Pakistan Economic Survey (2019-20) reported that the construction industry accounts for about 2.5% of GDP share and Pakistan has reached this score mainly due to CPEC projects.
A well-designed housing finance system could fruitful for the economy of our country through flourishing real estate sector. The real estate sector comprises of four main components i.e. land, residential, commercial and industrial. This sector is driving the 50+ allied industries and has its own supply chain mechanism, which includes contractors, professional service workers, building material supply companies, maintenance firms etc. and the efficient use of real estate business can have a significant impact on country’s economy. Fortunately, Pakistan is a 33rd largest country in the world by area and possess massive amount of land but strategy must be in place for smart land use policy for sustainable urbanization. The laws on real estate are 5 to 10 decades old and real-estate market all over the world has gone through massive transformation so in order to survive in ever changing world we also needs to update our laws. Currently, the real estate sector is using following 4 laws for selling and purchasing any property in Pakistan.
- Registration Act 1908: A statute that is use to verify the registration of property.
- Stamp Act 1899: This act gives guidelines to buyers and sellers to pay specified amounts to the government.
- Land Revenue Act 1967: The Land Revenue Act advises different functions such as conducting surveys, marking borders, partitions, and arbitrations. This document also sets directions for land and revenue department.
- Transfer of Property Act 1882: This document describes the procedure about transfer of real estate property in Pakistan.
This is very important if the real estate brokers, buyers, and sellers could have a basic knowledge of these laws so that hassle-free transaction could be made between two parties.
For sustainable housing projects development and to safe people from real estate scams, below real estate development process should be implemented so that innocent people will not be trapped by land mafia people.
Mostly the housing projects begin with the acquisition of land and ends up with selling of plots, apartments or houses built. Figure depicts the stages of various activities involved in housing project development process. In first three stages, the housing project developers can only receive statutory approvals from concerned government department and at these stages project initiators can market their business public.
Once the layout of proposed scheme has been approved by town planning authorities, developers can announce their projects for general public and can start internal work of housing project. Additionally, all the statutory approvals should be made public on concerned authority website.
For the last three decades, the real estate sector is very profitable for business but due to corrupt practices at different levels starting from estate agents to government bureaucracy have make this business to doldrums.
I believe, if we strictly implement the above mentioned model then we can drive our economy with fast pace and sustainable urban housing development could be possible.
[box type=”note” align=”” class=”” width=””]The author, Muhammad Iqbal, is a freelance columnist. He is an academician by profession. Currently is engaged with Bahria University as Assistant Professor. Mr. Iqbal could be reached at Mohammad Iqbal miqbal.bu@gmail.com”[/box]