Islamabad: In a first-of-its-kind project, Pakistan on Thursday started giving out apartments and houses to low-wage workers on easy mortage terms.
The affordable housing project offering 1,008 apartments and 500 houses on low mortgage rate would make home ownership accessible to financially vulnerable families, said Prime Minister Imran Khan who allotted the houses to their owners on Thursday. The project called ‘Labour Complex’, spread over an area of 2,560 kanals, is located in Islamabad’s Zone V.
Terming it a first-of-its-kind project for the vulnerable people, PM Imran Khan said his government approached banks and offered them incentives to allocate Rs380 billion (US$2.4 billion) for housing finance. “The government is offering a subsidy of Rs300,000 ($1,922) for each housing unit” under the chain of projects comprising of over 100,000 homes. At the same time, he also initiated the second phase of another 1,504-home project.
The premier said the project was in line with the government’s vision of offering a decent standard of living to low-income groups and their families. The subsidised rates would reduce the total cost of the apartment to Rs2,124,000 (US$13,600) and the house price to Rs2,354,000 (US$15,000). This subsidy would further reduce the monthly instalment and total cost of the house making it easier for the common man to own a house. They will get home ownership at a payment of 10 per cent of the total cost, while 90 per cent can be paid in easy instalments over a period of 20 years.
Under the low mortgage rate, what they pay in monthly instalments to the banks would be the same as paying house rent but instead they get immediate ownership of the home, Khan said. The interest rate is reported to be 3 per cent in the first five years and 5 per cent for the next five years.
Imran Khan pledged to build five million affordable homes in rural and urban areas when his government came to power in 2018. Khan said that after two years the courts finally approved the foreclosure law, which had held back the housing project financing through the subsidised bank loans, which would now pave the way for more such housing projects in other cities.
“This project is the beginning of providing low cost and affordable houses to the vulnerable segments of the society,” said Special Assistant on Overseas Pakistanis Zulfikar Bukhari. The government revived a housing project that had been gathering dust for more than 25 years and “it is now ready to be handed over in 2.5 years, he said. “1,508 homes have been constructed and 1508 more would be ready in next 18 months.”
State Bank of Pakistan (SBP) Governor Reza Baqir together with other banks have been crucial in making the project a reality with close collaboration with Naya Pakistan Housing and Development Authority (NAPHDA), Workers Welfare Fund and Overseas Pakistanis and Human Resource Development ministry.
Highlights
- 1,508 houses (1,008 apartments and 500 houses) for the low-income groups.
- 1,500 more to be built in 18 months.
- Low mortgage rate offered for the first time.
- Banks allocate Rs380 billion for housing finance.
