By Irfan Ahmed ISLAMABAD, Feb. 03 (INP-WealthPK): The Naya Pakistan Housing Programme (NPHP) is touted to be the biggest ever initiative taken to provide an accommodation facility to those who cannot afford one. More than 40 industries are associated with the housing and construction industry, particularly cement, timber, sanitary fittings, glass, steel, furniture, paint, plastics, electric fittings, cables and electronics. The country’s housing and construction industry accounts for 2.53% of Gross Domestic Product, according to the Pakistan Economic Survey. The industry employs 7.61% of the total labour force. The construction industry offers a sustainable income source with potential for capital appreciation and diversification. One estimate indicates that an increase of 100,000 in housing units in one year contributes to approximately 2% to the GDP. According to the World Bank, real estate assets account for 60% to 70% of a country’s overall wealth; and if these figures are extended to Pakistan, the real estate market will be worth $300 to $400 billion. It is the second largest employment generation industry in Pakistan after agriculture. Under NPHP, the government has sought to provide five million housing units to people, especially to the financially underprivileged and middle-income groups. SOURCE: Naya Pakistan Housing & Development Authority Minister of State for Information and Broadcasting Farrukh Habib estimated that the government’s steps to boost the housing and construction industry will bring about an investment of around Rs1 trillion. According to him, there is a shortfall of over 10 million houses in Pakistan, ‘and every year we are adding to this backlog’. Only 32 million houses have been built in Pakistan since 1947, 39% of which in urban areas. The annual housing demand is around 700,000 units in Pakistan, but the country constructs 250,000 to 300,000 houses, leaving a shortfall of 450,000 houses per annum. Housing costs in NPHP would be 15% to 20% cheaper than the market rates, with long-term financing available. In the first three years, it would increase the number of individuals who can afford housing by 100%. It is to mention here that currently, around 500,000 individuals can afford to purchase homes and flats each year in Pakistan. SOURCE: ResearchGate According to the Naya Pakistan Housing and Development Authority (NAPHDA), the government has allocated Rs30 billion as subsidy under the NPHP for buying construction materials to give a boost the country’s economy. Similarly, the government has also reduced interest rate by 90% for low-cost houses, while the banks are providing loans on 5% mark-up for five marla houses and 7% for 10 marla houses. In order to promote the construction of multistorey buildings (residential and non-residential), the government has also decreased different taxes. Eligible builders and developers have been exempted from withholding tax on the purchase of building material. The country’s economy will also get a boost as foreign investors are estimated to invest up to $25 billion in the scheme over the next five years. Apart from the foreign investment in the housing scheme, investment worth $8 billion to $10 billion per year is being made by overseas Pakistanis and another $2 billion to $4 billion by local builders. Growth in the real estate sector will not only solve the housing needs of Pakistan, but also create massive employment opportunities, thus potentially becoming a major contributor to the GDP.