Key Statistics – Housing & Housing Finance
• Population: More than 170 million,
– 2/3 rd rural-1/3 rd urban
• Number of persons per room: 3
• Access to formal finance: 14%
• Housing Finance to GDP ratio approximately 1%
• Economic Survey of Pakistan, 2011
• WB Study-Expanding Housing Finance to the Underserved in South Asia,
2011

Key Statistics – Housing & Housing Finance
•
•
•
• Housing Shortfall = 8 million units, 6 million of which concentrated in lower middle income group
Housing Supply per Year = 0.3 million units
Total housing needs = 0.7 million units per year
Major metropolitans like Karachi are facing high rate of urbanization – Karachi population 16 million plus, growing @ of 7-8% pa. Nearly half of Karachi’s population is squatter settlements (around 600-800). Karachi alone needs 100,000 new housing units per year to meet natural growth, cover backlog & urbanization pressure
 WB Study-Expanding Housing Finance to the Underserved in South Asia, 2011

90
80
70
60
50
40
30
20
10
0
Key Statistics – Housing & Housing Finance
Mortgage Finance Outstanding (Billion Rupees)
84
76 77
67
62
59
2006 2007 2008 2009 2010 2011

Key Statistics – Housing & Housing Finance
Weighted Average Interest Rate (%)
14
12
10
8
6
4
2
0
20
18
16
10,31
12,14
14,65
15,64
17,3
16,02
2006 2007 2008 2009 2010 2011

• National Housing Policy 2001
• National Housing Authority/Pakistan Housing Authority
• Prime Minister Housing Schemes
• House Building Finance Company Limited
• Formation of Housing Advisory Group by SBP
• Initiatives by Provincial Governments
• Private Sector Initiatives

Role of SBP in Promotion of Housing
Finance in Pakistan
• Formation of Housing Advisory Group
– Implementation of HAG recommendations
• Review of Prudential Regulations for Housing Finance
• Preparation of Housing Finance Guidelines
• Development of a Model for Builders/Developers Finance
• Capacity Building of Financial Institution in housing finance through seminars, workshops and training programs
• Development of secondary mortgage market in Pakistan by creating a Mortgage Refinance Company (MRC)
• Championing Low-income housing finance
• Involving key Stakeholders – ABAD, AMB

SBP formulated a Housing Advisory Group (HAG), drawing membership from different stakeholders. Its recommendations are being actively pursued by SBP
• Reforming Legal Framework affecting Foreclosure, Transfer, Tenancy,
Rent Control and Credit bureaus etc
• Rationalization of Transaction Costs
• Establishing an integrated land registration information system
• Increasing supply of land for affordable housing
• Structuring and streamlining large scale developer’s finance
• Facilitate low-cost/low-income housing models and products
• Facilitate Real Estate Investment Trusts (REITs)
• Provision of long term funding for housing loans
• Housing Observatory (housing market information system)
• Capacity building of the mortgage banking industry in Pakistan

• Develop the Primary Mortgage Market
– Provide financial resources to enable primary mortgage lenders
(PMLs) to grant more loans at fixed/hybrid rates and for longer tenure
– Prepare PMLs for BASEL compliance by narrowing the gap between the maturity structure of the housing loans and the source of funds
– Ensure loan standardization across primary lending institutions which is necessary for any future securitization
• Develop the capital markets
– Provide more private debt securities (Bonds) with different maturities and rates for investment of surplus funds
– Promote ABS as a tool for raising funds from the capital markets
– Create a Yield Curve to serve as a benchmark for other institutions

• The Housing Finance regulations are covered under
Consumer Finance Prudential Regulations.
• Since Housing Finance has its distinct nature and scope, there has been growing demand from all stakeholders to separate Housing Finance from
Consumer Finance.
• SBP intends to announce reviewed Housing Finance
Prudential Regulations this year.

• Comprehensive set of Mortgage Finance Guidelines covering all facets of Housing Finance (Conventional and Faith-Based) based on best lending practices.
• With active involvement of Association of Mortgage
Bankers and feedback from other Stakeholders, these Guidelines would be launched this year.

• SBP is working to develop financing models to facilitate large-scale builders/ developers’ access to formal financial sector.
• The Association of the Builders and Developers (ABAD),
Investment Bankers, Association of Mortgage bankers
(AMB) and Rating Agency have been consulted for the purpose.
• Key challenges include:
– Corporatization of large-scale developers
– Bankable financial statements
– Credit rating (Entity and Instrument Ratings)
– Fiscal issues relating to Book Value and Market Value, declared income and wealth etc.

• Ashiana Housing Scheme by Punjab Land
Development Company (Punjab Govt.).
• Hawksbay Scheme 42 by Lyari Development
Authority Karachi (plots + residential infrastructure)
• Lyari Re-settlement Project
• Housing Project by Ansar Management
Company
• Incremental Housing Scheme “Khuda Ki Basti” by Saaiban-NGO

• Naya Nazimabad, Karachi
• Khayabane Ameen, Lahore