I read malik raiz's article on real estate industry.
One point i agree that in most countries of the world, real estate loan, especially loan for first house is at much lower rate than the interest rates for other loans. Even loan for remodification of homes (home equity loan) is higher rate than the loan for buying a home. even though at the time of home equity loan, it is less risky and more equity is there in the home and lesser amount is involved.
I was surprised to know that home building loan in pakistan is much shorter term and rate is close to 18%
Abrar replied on Friday, October 31, 2008 01:39 AM
Most of the countries, which give loan at a lower rate to a homebuyer, also make sure that loan amount is spent on the same home. Diverting loan amount for any other purpose is not possible. I guess it is possible in Pakistan. No wonder Bahria Town itself has diverted people's money (Amanat) to who knows where. People have no clue what has happened to the money they have paid or will they ever be able to get their plots at the right location. Although I have no proof but I strongly believe that all those villas that Bahria Town has been marketing were developed with people's money, paid by the people not to develop villas but to buy residential plots in different sectors. |
