Tuesday, May 20, 2008
By Faryal Najeeb

KARACHI: The housing and construction industry is facing a mismatch between the annual need of 670,000 housing units and the construction of only 300,000 units per year. Sources and real estate agents claim that a major cause of mounting pressure on housing in urban areas is the rural-urban migration.

The demand for construction raw materials is increasing while international steel and cement prices continue to soar, which a common man is finding difficult to afford. A source explained that the cost of constructing a house now is at least 25 percent more than what it was a year ago. “Billets are one of the most significant raw materials for steel products which had cost less than $200 per tonne a year ago and now have hiked to $1,100 per tonne.”

Similarly cement companies are demanding to sell 50kg bag for Rs300, which is unaffordable for the common man, the source added. According to the FPCCI standing committee on housing and construction, World Bank statistics had reported a backlog of 7.0 million housing units against the backlog of 4.27 million in 1998.

Pakistan may face further housing backlog of 10 million units in the next 20 years beside the backlog of 7.0 million, if the construction industry is neglected continuously, the research further predicted.

Some projections in the report state that Karachi’s population will grow to 20.6 million and Lahore to 10.8 million in the next few years. It has been estimated that more than half of all housing units in Pakistan consist only of one room, shared by an average family at 6.5 people.

On the other hand, a related phenomenon is the mushrooming of slums (kutchi abadis) whose number rose from 471 in 1984 to 1,482 in June 2005. In all major cities, other problems include an increase in the crime rate and the large-scale power and water theft in slums through illegal connections.

Former senior chairman of FPCCI standing committee on housing and construction, Muneer Sultan informed that the government had taken some initiatives in the concerned sector which unfortunately failed with no results.

He informed that the National Housing Policy 2001 was announced but never implemented. He added that the potential to generate employment in this sector has not been taken seriously in the past, nor ever decided to revitalize it as a vehicle for economic revival.

Sultan further added that the last government had been sincere to develop the industry but bureaucracy prevented the growth of construction sector that would have directly benefited 72 allied industries.

“All over the world, the housing and construction sector contributes greatly to national GDP but in Pakistan, the government fails to recognize the sector’s importance which would eventually have dire consequences in the future,” he concluded.

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