![\"PM](\"https:\/\/www.zameen.com\/blog\/wp-content\/uploads\/2019\/12\/economic-lens-1-1024x640.jpg\")
However, it is relevant in the context of\nthe government\u2019s Naya Pakistan Housing Plan (NPHP). As a major agenda under PM\nKhan\u2019s regime, the plan intends to bring 5 million houses into construction\nacross the country. <\/p>\n\n\n\n
According to official numbers, this would\ncontribute Rs. 15 trillion to the economy— that\u2019s more than $100 billion\ndollars (if each unit is valued at Rs. 3 million on average). This makes up for\nmore than 30 percent of Pakistan\u2019s current GDP. <\/p>\n\n\n\n
There are other more measured\napproximations as well, which are not as overwhelming but do indicate huge\neconomic benefits. For instance, a World Bank study estimates that a unit\nincrease in expenditure in the construction sector has a multiplier effect, and\nthe capacity to generate income as great as five times the cost of the unit. <\/p>\n\n\n\n
Demand in\nthe housing sector feeds into as many as 40-50 allied industries, many of which\nare SMEs. Some of the biggest industries involved are steel, cement, marble,\nand other building materials sectors. A housing project will provide business\ngrowth for them, as well as for small manufacturing and service providers. <\/p>\n\n\n\n
To put some\nnumbers to that, based on the cost of housing in two major cities, Lahore and\nKarachi, a study published by Karandaaz Pakistan\ncalculates that building 100,000 incremental houses in Lahore alone will\ncontribute up to 1.9 percent to the GDP. For a million houses, the contribution\nwould be 10 times of that number. <\/p>\n\n\n\n
Meanwhile, the same number of apartments\nin Karachi, within a high-rise apartment building (estimated 40 apartments)\nshould yield 2.2 percent of the GDP output. This contribution is calculated\nsimply by using construction costs of various houses in Lahore and Karachi\nduring 2017. <\/p>\n\n\n\n
Another interesting number from the\naforementioned study is 2400 percent. That is the return on investment for a\nhousing project in the outskirts of Karachi for a high-rise complex with 600\napartments. Evidently, housing is not a social project, it is also an economic\none where the government\u2019s role should be that of a facilitator. <\/p>\n\n\n\n
Given these numbers though, the\ngovernment\u2019s fiscal support should be minimal anyway. The sector should be\ndriven by the active participation of private sector developers, builders, and\ninvestors. The government\u2019s housing project, therefore, has massive potential,\nwhich is why foreign investors are displaying tremendous interest in a project\nlike the NPHP. However, the government should ensure that this momentum and\nenthusiasm is positively facilitated through meaningful policy interventions in\nthe real estate sector of the country. <\/p>\n","protected":false},"excerpt":{"rendered":"
Housing may be viewed through a social lens, but it pays huge economic dividends as well. A global estimate is that for every $1 invested in housing, an additional $1.5 to $3 are contributed to the GDP. Going by various investment figures, ranging between $150 to $200 billion are required to fill Pakistan\u2019s current shortage of 10-12 million houses, that would make a mammoth contribution to the GDP\u2014more than mammoth, in fact, possibly even doubling the GDP from its current level. Of course, these are extrapolated estimates. Building 10 million houses across a country where the housing stock has grown only marginally, (by 100,000 – 350,000 units annually against an annual increasing demand of 400,000 to 700,000 units), it would be an incredible feat to accomplish even a fourth of that number. However, it is relevant in the context of the government\u2019s Naya Pakistan Housing Plan (NPHP). As a major agenda under PM Khan\u2019s regime, the plan intends to bring 5 million houses into construction across the country. According to official numbers, this would contribute Rs. 15 trillion to the economy— that\u2019s more than $100 billion dollars (if each unit is valued at Rs. 3 million on average). This makes…<\/p>\n","protected":false},"author":97,"featured_media":77054,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[48083,7498,43961,26742],"persona":[36016,32409,32411],"class_list":{"0":"post-77053","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-construction","8":"tag-construction-multiplier","9":"tag-economic-growth","10":"tag-lob","11":"tag-naya-pakistan-housing-scheme","12":"persona-business-community","13":"persona-constructiondevelopments","14":"persona-property-investment","15":"cat-29-id"},"acf":[],"yoast_head":"\n