Zameen Interviews – Ahsan Iqbal Shares His Views on Naya Pakistan Housing Programme

On April 27, 2019, Prime Minister Imran Khan inaugurated the Naya Pakistan Housing Programme (NPHP), a government-run low-cost residential scheme that aims to construct five million housing units, in five years, mainly for the underprivileged segment of the society. To effectively increase the pace of the progress of this housing project, the government has recently taken some noteworthy measures. The installation of a “Chinese Prefabricated Housing Plant” is one of the most significant and recent updates from the Naya Pakistan Housing Program. Ahsan Iqbal shared his views on the NPHP on Zameen Interviews. Let’s find out what he has to say about the ambitious project.

About Mr. Ahsan Iqbal

Mr. Ahsan Iqbal is a Pakistani politician and a development expert. Currently, he is serving as a member of the opposition in the National Assembly. He served as the Interior Minister and the Minister of Planning and Development in Pakistan from 2013 to 2018. He is associated with the Pakistan Muslim League Nawaz (PML-N).

Ahsan Iqbal on Zameen Interviews

While appearing in one of the interviews by Zameen.com, Ahsan Iqbal candidly expressed his opinions on the NPHP.

“The economic success of any country greatly depends on the efficiency of its housing sector,” Mr. Iqbal began. “If this sector is robust, it will bring dynamism to the construction industry, on the whole.”

“No one can deny the role of the housing sector in a country’s progress, as when the construction industry progresses, it positively impacts the economy,” he further added, while explaining why the housing sector is crucial for a developing country like Pakistan.

How can low-cost housing models become successful? 

While answering this question, he explained the success factors behind a residential scheme by saying, “Along with good intentions, all the required financial, legal and market-related parameters must be fulfilled to turn a (housing) scheme into a success.”

Do you believe NPHS would actually improve the country’s housing situation?

Mr. Iqbal stated a low-income housing project like the Naya Pakistan Housing Programme has great potential to improve the housing situation in Pakistan. He added the most important thing that the government needs now to make the scheme work is the timely arrangement of all the resources required.

What hurdles does a government typically face when it comes to low-cost housing projects?

While answering this question, Ahsan Iqbal explained the factors that might become hurdles in the development of low-cost housing projects in Pakistan and the aspects of overcoming such obstacles. He said, “Double-digits interest rates even make low-cost housing schemes out of reach of a common man because of hefty instalment amounts. It also makes it difficult to implement mortgage financing in Pakistan. However, the effective solution to this problem is the implementation of foreclosure laws which should be recognised and protected by the courts.”

Foreclosure Law: A legal process in which the possession of an unpaid or defaulting property is taken back by the bank. This is currently not being practiced in Pakistan.

Mortgage: An agreement that allows someone to borrow money from a financial organisation by offering something of the same value. 

How can the government make housing a successful venture? 

Answering this question in the light of his experience, Mr Ahsan Iqbal said, “Whenever a subsidised housing scheme is initiated, it faces sustainability issues. So, instead of the government being the main player, market forces should be allowed to work independently, it will make it easier for them to operate.”

Explaining how easy-to-understand regulatory framework facilitates builders, Mr. Iqbal stated, “The regulations should be made easy so that the stakeholders behind any particular housing project should have to face the least possible obstacles in the process of acquiring necessary legal permission.”

What is the role of banks in providing mortgage-based financing? 

“Whenever a bank provides concessional financing scheme, it tries to find ways to compensate for the low mark-up and concessional rates. It will either cut from its profit (which is ideally not the case) or ask the concerned government institution to provide compensation. Only then, it will process the financing request. Doing necessary economic reforms will eventually bring down the interest rates, eventually bringing mortgage-based financing within the reach of more people. High-interest rates have always been an obstacle in the progress of the real estate industry around the world,” answered Mr. Iqbal.

Do you see any prospects for success in Naya Pakistan Housing Scheme?

“The success of the Naya Pakistan Housing Scheme chiefly depends on the economic condition of the country,” he answered. According to Mr. Iqbal, a stable financial market, low-interest rates and better framework of law will allow the government to necessarily speed up the pace of the Naya Pakistan Housing Scheme’s development work.

What are some of the measures that can control population pressure in urban centres?

Population growth usually exerts strong pressure on urban centres in the cities. According to Ahsan Iqbal, urban sprawl is one of the best solutions to curb such a situation.

“It is important to reduce population pressure from the cities,” he said. “The government should try and encourage developing all new housing schemes in the peripheries of the existing cities. Residential projects in the suburbs of any particular city in Pakistan should be feasibly linked with the city centre to ensure easier and less time-consuming commutes. Mass Transit Projects like the Lahore Metro Bus and Orange Line work best in this concern. People usually prefer living on the outskirts of a city, because it is where they usually come across affordable housing options. Linking a housing project located in the periphery of a city with different modes of public transport plays a pivotal role in its success as it makes commuting easier.”

Periphery: As a real estate term, it means a suburb or outskirts of a metropolitan area.

Do you think Naya Pakistan Housing Scheme is a rebranding of the schemes proposed by the previous governments?

“It will be too early to comment on anything in this regard as the project’s development is still in its initial stage,” he replied.

What recommendations would you give to the incumbent government?

Emphasising on institutional reforms in regulatory authorities, Mr. Iqbal responded to the question by saying, “Simplifying the process of acquiring approval for the housing projects from regulatory departments should be the government’s top priority. Similarly, the legal framework governing different aspects of property ownership in Pakistan needs to be improved.”

Before wrapping up the interview, Mr. Ahsan Iqbal once again talked about the importance of foreclosure laws for the construction industry in Pakistan. “As I said, foreclosure law should be implemented as soon as possible so that the stakeholders in the property sector can get protection for the piece of land and property units under their ownership,” he stated.

Lastly, Mr. Iqbal suggested the government should work on economic reforms to bring down the interest rate, which, according to him, will result in the growth of the housing sector in the country.

Meanwhile, to get more insights on the Naya Pakistan Housing Scheme, you can take a look at Zameen’s interview with former finance minister Asad Umar as well as a special episode featuring Imran Ali Khan, who is the CEO of EMPG (Emerging Markets Property Group) and co-founder of Zameen.com.

How informative have you found Zameen Interviews so far? Do you have any questions regarding NPHS you’d want us to ask? Send in your feedback at blog@zameen.com.

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