Pakistan has one of the lowest per capita housing ratio in the region despite evidently having a booming construction industry in the country. According to State Bank’s Quarterly Housing Finance Review, the country is facing a shortage of 9 million housing units, especially in urban centers. The formal financial sector caters to only 2 percent of all housing transactions whereas the shortage suggestively piling up at 0.34 million units every year. The informal lending caters up to 10-12pc of transactions for housing.
There are several factors which hinder the development of the construction industry and land mafia is one of the stigmas in the face of society. There are thousands of housing schemes which have turned into financial scams thanks to centuries-old land record system and corrupt business practices. The housing sector is one of the business domain where the financial indiscipline and fraud is its hallmark. India has, for example, computerized all of its land record, but the Pakistani nation is still reeling under the patwari system. Like other sectors of the economy, the housing sector drastically needs government attention to amend laws, improve administrative procedures and ensure fairness in the business.
The SBP review calls strengthening of the land procedural system and computerization of the land record as the industry suffers trust deficit. According to the review,the process of land acquisition and land registration is complex due to the involvement of a number of institutions and registration procedures.The manually-maintained land record could add errors and omissions and it is difficult for thefinancial institutionsto translatethe modest commercial value for the mortgage. The banks offer limited access to housing finance due to lack of efficient and reliable system to ascertain the credentials of the property titles.
The master plans for town planning and housing facilities are often poorly maintained and implemented leading to inefficient allocation of land and uncontrolled urban development. It is the time, the government wake up from slumber and regulate the industry to launch development projects not only in Pakistan, but also abroad. Germany, South Korea and Turkey have emerged as construction giants on the canvas of the world construction industry. Pakistan can bag its share of profit keeping in view the outlook of various giant construction establishments in the country.Despite having billions of rupees budget, the local constructions lords still have introvert approach whereas time is ripe to bid in the international construction projects.