Karachi: The government on Saturday decided to further reduce the Mark-Up Rates For House Finance By State Bank Of Pakistan (SBP) under the Naya Pakistan Housing And Development Project. The circular isued by the central bank said that the government has decided to revise markup rates and subsidy payment period under Tier-1 in response to the views of different stakeholders. The decision of the government to revise the rates downwards is aimed at boosting the housing sector which hasn’t come up to the expectation of the government despite numerous incentives provided and a number of steps taken in this regard. The government is doing its best to encourage the housing and construction sector to emerge as one of the most prominent industries in the country.
As per details, the central bank has reduced the markup for financing for one to five years tenure from 3 percent to 2 percent and from 6 to 10 years reduced to 4 pc from previous 5pc and the same financing rate for 11 to 15 years has been set to 5pc from the previous KIBOR plus 250 basis points. However, the central bank stated that for loan tenor beyond 15 years market rate bank prices will be applicable. It is to be mentioned here that previously there was no concept of housing loans or mortgages in Pakistan but the current government decided to take the steps in this regard. The central bank imposed certain compulsions on the commercial banks to promote financing for housing and construction.
In response to the steps of the government the year 2021 saw a tremendous increase in financing for the housing and construction sector. Under the Mera Pakistan Mera Ghar, the financing of around 117 billion was noted and the total applications from potential customers for financing amounted to around 276bn till the year 2022. Although the year 2021 saw an increase of 85 percent in loans for the housing and construction sector. The banks disbursed an amount of around 38 billion and the credit for house construction raised by 163 billion in the year 2021. It is to be mentioned here that the incumbent government right after coming at the helm of affairs decided to promote the housing and construction sector.