With few houses in sight, adjust yourselves

People will flock to even a half-decent project.

KARACHI:

Manghopir is an area people in Karachi avoid entering, if given a choice. Infested with crime and militants, the narrow lanes make one feel like there is no escape — provided an outsider does decide to visit.

You add Kati Pahari, located nearby, that has a history of politically-backed groups digging trenches to fight battles in the past, and the entire area does not paint too pretty a picture.

But in late 2011, people disregarded the fear and drove in the hundreds to a new housing scheme — called the Naya Nazimabad.

Smack between the Manghopir Lake, hills, Pakthunabad and Qasba Colony, the plots put for sale in the first phase were sold in a matter of weeks.



While names of renowned brokers like Arif Habib and Akeel Karim Dhedhi backing the project increased buyers’ confidence, the overwhelming turnout was response to a properly-planned housing scheme launched after a long time. The pending demand, such is the scarcity of quality housing schemes, was so much that it didn’t take long for Naya Nazimabad to woo investors.

The intensity of public response was the same when Bahria Town came to the fore, taking applications for its first township project in the port city. People waited in long queues for hours to register.

No concrete data an issue

There is no concrete data available to suggest the prevailing demand for houses. According to a poorly drafted National Housing Policy prepared in 2001, the number of housing backlog should be close to 8 million units until now.

How can a project be planned without comprehensive data? How is homework supposed to be done without concrete numbers?

This reflects the importance policymakers attach to the subject, industry people say.

Real estate development in Pakistan has gradually moved from the hands of the government to the private sector over the years. The move, given that private developers have a better reputation, should have helped the public.

However, the industry has been hardly regulated, resulting in the rise of real estate speculators who slowly pushed a large part of population to the slums.

Some perspective

The government-backed Karachi Development Authority (KDA) built the city with 42 housing schemes as a semi-autonomous body over a period of four decades.

“Our projects were never out of the reach of public,” said former KDA director Mukarram Sultan Bukhari. “It is the best example of how state developers help reshape metropolitan cities.”

The concept of satellite towns around populated cities from where most of the demand for housing arises should have taken off by now. Lack of resources, quicker return on investments made in already congested areas and official apathy are all to be blamed for the debacle.

This has led majority of the population to live in semi-built houses, often constructed on encroached land.

“When you need a home, you knock the doors of the government. When nothing happens, you approach a real-estate agent. When he asks for a lot of money, you head to the land grabber who conveniently finds you a home in a squatter. This is how we are dealing with the situation. Even then, my experience has shown that 80% of people who live in slums actually pay for property. This means they will do everything to have a roof over their head.”

Nevertheless, the House Building Finance Corporation (HBFC) has played a major role in development of housing. The HBFC enabled thousands to buy apartments in Gulshan-e-Iqbal and Gulistan-e-Jauhar.

Where the real estate price surge since 2004 has made many middle-class dwellers millionaires, it has created a crisis for the government.

“Prices have spiralled out of control,” says Shafi Jakvani of Citi Associates, a real-estate consultant. “With no checks, speculators have pushed up the prices so much that it’s hard to calculate the real asset value.”

A lot of money has also flowed into real estate from abroad. Around 5.9 million expatriates are sending in excess of $12.7 billion. Villas and malls in Gujrat, Jhelum and Gujranwala are partly funded from these remittances, industry people say. Too much has been left in the hands of the private sector, which works for commercial interest alone. But then if the government finds it hard to hand over large tracts of land for development, it should at least fix state-run agencies like the Malir Development Authority.

Published in The Express Tribune, November 25^th, 2013.

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