People looking for houses under the Naya Pakistan Housing Scheme will have to pay 20 percent of the total cost of the house upfront.
Firdaus Shamim Naqvi, the Opposition Leader in Sindh Assembly and a member of the Task Force on 50 million houses’ project revealed this on Monday.
Shamim, in a joint press conference with other members, said the owners would contribute 20pc of the total cost as down payment; remaining 80pc payment will be provided by bank borrowing under the proposed financing model.
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Naqvi proposed the repayment plan saying that the owners would return the bank loans of Rs 2 million (with 10pc mark-up) in 20 years’ time – the monthly installment has been set at Rs 18,564 which is equivalent to existing rental levels.
Naqvi revealed that the government would require financing of Rs 16 trillion to build five million houses in five years.
“If the cost of the lowest category house/apartment is Rs 3 million, the applicant will have to pay Rs 600,000 as down-payment,” said Mr Naqvi.
Shamim Naqvi added that the government was going to adopt rent equalization model to keep the project low-cost and within people’s range.
“Total housing requirement in the country stands at more than 10 million, but we intend to construct 5 million in the next five years,” Firdous Shamim Naqvi said.
Naqvi maintained that competitive bidding would be carried out for the selection of builders in a transparent manner.
In the joint press conference after the meeting, the Task Force chairman Zaigham Rizvi, flaunted by other members said they were going to present a bill for the establishment of Housing Authority.
He said the bill has to be approved from the provincial assemblies of Punjab, KP and Baluchistan. Rizvi revealed that Sindh has refused to cooperate with the Federal government for the project and aims to unveil its own housing scheme at the provincial level.
According to Rizvi, the government will construct one million housing units in rural, urban and semi-urban areas in the first year. He estimated the cost to be around Rs 3.2 trillion, out of which Rs 1.3 trillion will be obtained through bank borrowing, he said.
Zaigham Rizvi said he had requested the banks to increase the financing limit by up to five percent to raise it to Rs 500 billion.
“We are recommending to the government to reduce the tax burden for banks on the portfolio allocated for house financing. The capital adequacy ratio (CARs) for banks will also be increased,” he added.