{"id":83372,"date":"2020-03-03T12:53:27","date_gmt":"2020-03-03T12:53:27","guid":{"rendered":"https:\/\/www.zameen.com\/blog\/?p=83372"},"modified":"2020-03-03T13:16:35","modified_gmt":"2020-03-03T13:16:35","slug":"analyzing-fiscal-side-naya-pakistan-housing-scheme","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html","title":{"rendered":"Analyzing the fiscal side of Naya Pakistan Housing Scheme"},"content":{"rendered":"\n

So far, we have made\nthree important arguments about the potential pitfalls that the Naya Pakistan\nHousing Plan (NPHP) will confront. One, that in order to make the program\nsuccessful, the government will have to maintain some semblance of price\nstability in construction costs. <\/p>\n\n\n\n

The program can only run on prices that are pre-determined by the developer, which can be paid for by the beneficiaries in easy monthly installments, such that the developer also does not lose his commercial viability. However, inflationary pressures<\/a>, particularly in construction materials, is a dire concern.<\/p>\n\n\n\n

This directly relates to affordability as the NPHP\u2014in principal\u2014hopes to address the housing shortage<\/a> that exists in the low-income segment, and will ultimately increase supply where existing stocks are missing\u2014predominantly for the middle to low income households in the country. <\/p>\n\n\n\n

Second, as we have established in our earlier piece<\/a>, the government will have to provide a subsidy under the pilot project that is currently being run by the Punjab Housing and Town Planning Agency (PHATA) in six locations in Punjab. <\/p>\n\n\n\n

The fixed prices for\n3 and 5 Marla houses under the project are within the range of Rs1.8 million to\nRs4.11 million. Meanwhile, there are three installment plans: in the lowest\ncategory, applicants will pay a monthly Rs5,000 to Rs10,000 after a 10 percent\ninitial down-payment; Rs10,001 to Rs15,000 in the middle category and in the\nhighest category, applicants will pay between Rs15,001 to Rs20,000. <\/p>\n\n\n\n

Evidently, the applicants will have to opt for a mortgage, because without one, the repayment plan lasts between 6 to 15 years. Will developers wait that long to recover their costs and profits? It seems unlikely. The only product which seems the most affordable is the fixed rate mortgage provided by the House Building Finance Company (HBFC)\u2019s Ghar Pakistan Schemes<\/a>. This scheme is available for a house price up to Rs4.5 million. The product is for a fixed term of 12 percent along a tenor of 20 years and because it is fixed, applicants will not have to worry about rising interest rates. But as we have estimated, the monthly mortgage payment for most of the houses under the pilot are beyond Rs20,000\u2014the upper limit of our highest installment category. <\/p>\n\n\n\n

The government\nsubsidy will have to fill this gap. Unfortunately, this is where a lot of\nguesswork comes in. We will have to run with averages since we do not know the\nactual distribution of houses to be constructed in terms of size and housing\nprice, in addition to, how many allottees have chosen which monthly installment\nplan.<\/p>\n\n\n\n

\"Analysis
Analysis for Housing affordability and subsidy under Naya Pakistan Housing Programme<\/figcaption><\/figure>\n\n\n\n
\"the
Subsidy required per year with the number of houses<\/figcaption><\/figure>\n\n\n\n

Based on our\nestimates, using the average housing price, the average mortgage payment under\nGhar Pakistan scheme, and the average monthly installment under the NPHP (of\nRs15,000, if the PHATA constructs 10,000 in the pilot project), the government\nwill have to pay Rs1.5 billion each year for 20 years. <\/p>\n\n\n\n

That adds up! In\nfact, this subsidy balloons to a mammoth amount every year as more houses are\nconstructed. If the government can construct only 10 percent of the promised 5\nmillion houses, it will be paying nearly Rs80 billion in subsidies every year\nfor the entire duration of the mortgages. <\/p>\n\n\n\n

Does Pakistan have\nthis much money? More importantly, will subsequent governments honor the\ncommitment that this government will potentially make during its tenure under\ntheir budgets? These are questions that need to be seriously considered. <\/p>\n","protected":false},"excerpt":{"rendered":"

So far, we have made three important arguments about the potential pitfalls that the Naya Pakistan Housing Plan (NPHP) will confront. One, that in order to make the program successful, the government will have to maintain some semblance of price stability in construction costs. The program can only run on prices that are pre-determined by the developer, which can be paid for by the beneficiaries in easy monthly installments, such that the developer also does not lose his commercial viability. However, inflationary pressures, particularly in construction materials, is a dire concern. This directly relates to affordability as the NPHP\u2014in principal\u2014hopes to address the housing shortage that exists in the low-income segment, and will ultimately increase supply where existing stocks are missing\u2014predominantly for the middle to low income households in the country. Second, as we have established in our earlier piece, the government will have to provide a subsidy under the pilot project that is currently being run by the Punjab Housing and Town Planning Agency (PHATA) in six locations in Punjab. The fixed prices for 3 and 5 Marla houses under the project are within the range of Rs1.8 million to Rs4.11 million. Meanwhile, there are three installment plans: in…<\/p>\n","protected":false},"author":97,"featured_media":83376,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[55868,43961,26741,26742,42928],"persona":[32411,35639],"class_list":{"0":"post-83372","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-construction","8":"tag-fiscal-side-of-naya-pakistan-housing-scheme","9":"tag-lob","10":"tag-naya-pakistan-housing-project","11":"tag-naya-pakistan-housing-scheme","12":"tag-zameen-research","13":"persona-property-investment","14":"persona-property-management","15":"cat-29-id"},"acf":[],"yoast_head":"\nAnalyzing the fiscal side of Naya Pakistan Housing Scheme | Zameen Research<\/title>\n<meta name=\"description\" content=\"Outlining the likely problems the Naya Pakistan Housing Scheme will face.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analyzing the fiscal side of Naya Pakistan Housing Scheme | Zameen Research\" \/>\n<meta property=\"og:description\" content=\"Outlining the likely problems the Naya Pakistan Housing Scheme will face.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html\" \/>\n<meta property=\"og:site_name\" content=\"A blog about real estate, lifestyle and tourism in Pakistan | Zameen Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ZameenPK\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-03T12:53:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-03T13:16:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1440\" \/>\n\t<meta property=\"og:image:height\" content=\"625\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Zameen Research\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ZameenProperty\" \/>\n<meta name=\"twitter:site\" content=\"@ZameenProperty\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Zameen Research\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Analyzing the fiscal side of Naya Pakistan Housing Scheme | Zameen Research","description":"Outlining the likely problems the Naya Pakistan Housing Scheme will face.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html","og_locale":"en_US","og_type":"article","og_title":"Analyzing the fiscal side of Naya Pakistan Housing Scheme | Zameen Research","og_description":"Outlining the likely problems the Naya Pakistan Housing Scheme will face.","og_url":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html","og_site_name":"A blog about real estate, lifestyle and tourism in Pakistan | Zameen Blog","article_publisher":"https:\/\/www.facebook.com\/ZameenPK","article_published_time":"2020-03-03T12:53:27+00:00","article_modified_time":"2020-03-03T13:16:35+00:00","og_image":[{"width":1440,"height":625,"url":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg","type":"image\/jpeg"}],"author":"Zameen Research","twitter_card":"summary_large_image","twitter_creator":"@ZameenProperty","twitter_site":"@ZameenProperty","twitter_misc":{"Written by":"Zameen Research","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#article","isPartOf":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html"},"author":{"name":"Zameen Research","@id":"https:\/\/www.zameen.com\/blog\/#\/schema\/person\/154e3dab4d77bca533745c445b3a509f"},"headline":"Analyzing the fiscal side of Naya Pakistan Housing Scheme","datePublished":"2020-03-03T12:53:27+00:00","dateModified":"2020-03-03T13:16:35+00:00","mainEntityOfPage":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html"},"wordCount":582,"image":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#primaryimage"},"thumbnailUrl":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg","keywords":["fiscal side of Naya Pakistan Housing Scheme","LOB","naya pakistan housing project","naya pakistan housing scheme","zameen research"],"articleSection":["Construction"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html","url":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html","name":"Analyzing the fiscal side of Naya Pakistan Housing Scheme | Zameen Research","isPartOf":{"@id":"https:\/\/www.zameen.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#primaryimage"},"image":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#primaryimage"},"thumbnailUrl":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg","datePublished":"2020-03-03T12:53:27+00:00","dateModified":"2020-03-03T13:16:35+00:00","author":{"@id":"https:\/\/www.zameen.com\/blog\/#\/schema\/person\/154e3dab4d77bca533745c445b3a509f"},"description":"Outlining the likely problems the Naya Pakistan Housing Scheme will face.","breadcrumb":{"@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#primaryimage","url":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg","contentUrl":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2020\/03\/cover-photo.jpg","width":1440,"height":625,"caption":"Analyzing the fiscal side of Naya Pakistan Housing Scheme"},{"@type":"BreadcrumbList","@id":"https:\/\/www.zameen.com\/blog\/analyzing-fiscal-side-naya-pakistan-housing-scheme.html#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.zameen.com\/blog"},{"@type":"ListItem","position":2,"name":"Construction","item":"https:\/\/www.zameen.com\/blog\/construction"},{"@type":"ListItem","position":3,"name":"Analyzing the fiscal side of Naya Pakistan Housing Scheme"}]},{"@type":"WebSite","@id":"https:\/\/www.zameen.com\/blog\/#website","url":"https:\/\/www.zameen.com\/blog\/","name":"A blog about real estate, lifestyle and tourism in Pakistan | Zameen Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.zameen.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.zameen.com\/blog\/#\/schema\/person\/154e3dab4d77bca533745c445b3a509f","name":"Zameen Research","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2019\/10\/zameen_logo_vertical_03zr-96x96.jpg","url":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2019\/10\/zameen_logo_vertical_03zr-96x96.jpg","contentUrl":"https:\/\/cdn-blog.zameen.com\/blog\/wp-content\/uploads\/2019\/10\/zameen_logo_vertical_03zr-96x96.jpg","caption":"Zameen Research"},"description":"An initiative to analyze policies associated with the real estate sector of Pakistan."}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/posts\/83372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/users\/97"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/comments?post=83372"}],"version-history":[{"count":6,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/posts\/83372\/revisions"}],"predecessor-version":[{"id":83417,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/posts\/83372\/revisions\/83417"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/media\/83376"}],"wp:attachment":[{"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/media?parent=83372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/categories?post=83372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/tags?post=83372"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.zameen.com\/blog\/wp-json\/wp\/v2\/persona?post=83372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}