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Hike in Karachi’s property prices failure of government: Johar Iqbal

Construction is a major industry throughout the world accounting for a sizeable proportion of most countries’ Gross Domestic Product (GDP). The importance of the construction sector is not only related to its size but also to its role as a catalyst in economic growth.

MM News met with Johar Iqbal, CEO of Johar Estate and Deputy Convener of FPCCI Standing Committee, regarding the problems facing the construction industry in the country.

MM News: Why is real estate industry considered the most suitable for laundering black money?

Johar Iqbal: Unfortunately in Pakistan, it has become a tragedy to portray things in a negative light. When it comes to laundering black money in real estate, keep in mind that this real estate is the only sector in Pakistan that has a complete record.

Whether you buy land in a prestigious area or in a slum, all its paperwork and evidence are made part of the record. In such cases, declaring it suitable for laundering black money is an affront.

MM News: How one can differentiate between black and white money in real estate sector?

Johar Iqbal: Actually, it is very difficult to determine. If a person buys land in Pakistan, its market value is Rs10 million but in FBR and DC papers it is upto Rs2 million and here the white also turns into black. It is the failure of the government, because until the land is not sold according to the market value the problem will remain.

MM News: Why the government gave amnesty to the construction industry?

Johar Iqbal: The government wants common man, daily wager or government servants to build their own homes. The construction industry plays a pivotal role in the economy. This is one way of providing employment, wealth creation, increasing revenues to meet expenses and repaying loans.

Dozens of industries, including cement, ceramics and others, run alongside the construction sector. That is why the government wants to boost the construction industry and employment in the country.

MM News: Are construction activities going on in Sindh?

Johar Iqbal: Unfortunately, the construction sector across the country has not been able to function to its full potential. Construction activities in Karachi and Sindh are not being carried out as compared to Islamabad and Punjab.

MM News: Why is it impossible for a person earning 25,000 to build his own house?

Johar Iqbal: If someone’s income is low then it is the responsibility of the state to provide him a roof. Centre is announcing various incentives to provide houses to the common men and steps are being taken in this regard.

In Punjab, maps of more than 250 buildings have been passed under the New Pakistan program, but sadly, only 21 maps have been approved in Sindh so far. Prime Minister Imran Khan should take note of this unfortunate situation.

MM News: Will country face any challenges due to fewer construction activities in Sindh?

Johar Iqbal: It is a fact that when Sindh’s construction industry develops, it benefits the whole country, but at present construction activities in Sindh are slow. However, the FPCCI platform has been constantly informing the Prime Minister that construction activities in Sindh are less as compared to other provinces, which need to be increased.

MM News: Why property prices are rising in Karachi?

Johar Iqbal: It is actually the failure of the government. When the government fails to provide basic needs to its citizens, the residents of the backward areas leave their native lands and move to the prestigious areas.

And when such a situation arises in the city, the rise in prices is a must. However, if the government provides the same facilities to the people throughout the city, the citizens will not turn to other areas and property prices will decrease automatically.

MM News: Your view on PTI’s promise to provide 5 million houses to the people?

Johar Iqbal: It is difficult but not impossible. This government may not be able to fulfill its promise but if the government builds 500,000 houses it will be a great achievement.

MM News: Why do Karachi citizens invest low in property business?

Johar Iqbal: Karachi has lost the confidence of investors. When we sell anything in Karachi, people are skeptical that our papers will be challenged or that another claimant will arrive. That is why people in Karachi today are afraid to invest, which is a major cause of concern for low investment.

MM News: Your view on Karachi becoming a concrete jungle?

Johar Iqbal: Karachi is undoubtedly a forest of buildings and there have been many earthquakes in Karachi but by the grace of Allah, the city was remained safe. As far as criticism of national institutions is concerned, the judiciary should also question those who allow building such huge structures.