As Pakistan prepares to unveil a new subsidised housing finance scheme in the upcoming fiscal year, experts warn that without tax relief, inter-agency coordination, and public outreach, the initiative risks repeating the shortcomings of earlier efforts.
The scheme—reportedly inspired by the discontinued Mera Pakistan Mera Ghar programme—aims to boost demand in the construction and real estate sectors while expanding homeownership opportunities for middle- and lower-income groups. It comes at a time when Pakistan’s mortgage-to-GDP ratio remains critically low at under 1%, reflecting the country’s underdeveloped housing finance infrastructure.
Despite a proposed Rs5 billion subsidy in the 2025–26 federal budget, stakeholders are concerned about persistent structural obstacles, including unclear eligibility criteria, soaring land and construction costs, and the limited purchasing power of the intended beneficiaries.
The State Bank of Pakistan (SBP) is expected to oversee the rollout, with plans to offer subsidised markup rates to ease the financial burden on borrowers. However, the details—including the scheme’s name, structure, and targeted income categories—are yet to be finalised.
According to Ibrahim Amin, CEO of TriStar International and a real estate valuation expert, the government is reintroducing housing finance at a potentially opportune moment, with falling interest rates creating a more favourable lending environment.
“This initiative could jumpstart economic activity in the real estate and construction sectors, attract local and overseas investment, and generate employment across the board,” said Amin.
He believes the scheme could also help offload hundreds of unsold or undersold housing units in private societies that have been hit by inflation and low demand. Government-announced tax relief on property transactions may further stimulate market movement, Amin added.
Still, memories of the previous programme’s limited success loom large. Launched in 2019 and discontinued in 2022 amid surging interest rates, it generated significant public interest—banks received financing requests worth Rs514 billion, but only Rs235 billion was ultimately approved. Experts attribute this gap to institutional bottlenecks, inadequate awareness, and regulatory inconsistencies.
“The banking industry now has the experience and systems in place to support a national housing finance scheme,” Amin noted. “What we need is a decisive policy announcement backed by execution.”
Maaz Liaquat, a Karachi-based realtor, echoed similar sentiments. He highlighted the severe housing shortfall—estimated at 1.2 million units—and stressed the importance of reviving affordable housing finance as a driver of both economic recovery and social stability.
“High land and construction costs have stalled small and mid-scale apartment projects,” Liaquat said. “This scheme, if structured right, can energise stalled developments and attract both overseas Pakistanis and first-time homebuyers.”
He also recommended that the government work with local authorities to simplify real estate regulations and reduce the tax burden on eligible beneficiaries to increase affordability.
As anticipation builds, stakeholders agree that the new housing scheme must move beyond announcements and subsidies, delivering a coherent, well-coordinated policy framework that prioritises long-term affordability, institutional accountability, and market confidence.
