UNDER the guidance of Governor Reza Baqir, State Bank of Pakistan continues to take steps to facilitate the people in getting loans for construction of their homes.
In a recent notification, the central bank has further relaxed rules for house financing and allowed individual buyers to obtain loans for residential units in projects under development.
In fact, the cost of a housing unit or a residential plot in developed projects is very high and also exceeds the bank loan limit of Rs 60 million.
In contrast, prices at the under construction housing projects remain comparatively on the lower side.
Hence latest initiative of the SBP will help and enable common man to turn the dream of owning a house into a reality.
It is a matter of satisfaction that both government and the SBP are showing seriousness and continue to address problems coming in the way of Naya Pakistan Housing scheme which envisages construction of five million houses.
Earlier, the central bank also directed commercial banks to increase maximum amount of housing loans to seven percent of their total disbursements to private sector in the current year.
Prior to this, banks were given eighteen months to disburse a total of five percent for the period ended December 31, 2021.
Banks approved a total of Rs355 billion during 2021, including Rs38 billion for low-cost housing schemes.
In our view, banks should be further encouraged to expedite the process of approval housing finance as there are certain public complaints that banks are very slow on their loan applications.
If the government really wants to reach somewhere close to the promised construction of houses, then it will have to ask banks to approve loans in matter of weeks and not months.
Given current price hike, government should also enhance loan limit keeping in view the market rate.
