The scheme aims to make home ownership possible for the middle and low-income groups.
KARACHI: The federal government plans to introduce a new subsidized housing finance scheme in the next fiscal year, aimed at boosting demand in the real estate and construction sectors and making home ownership possible for the middle and low-income groups.
However, the new scheme, inspired by the “Mera Pakistan Mera Ghar” scheme, may face several challenges, including uncertainty over eligibility and structure, high cost of land and construction, and limited financial capacity of the targeted beneficiaries.
Pakistan’s mortgage-to-GDP ratio is less than one percent, raising doubts about banks’ aggressive lending despite a subsidy of Rs5 billion allocated for the scheme in the federal budget for 2025-26.
Experts say that if this scheme remains devoid of institutional coordination, tax reforms and public awareness, it may also fail to achieve its objectives. This scheme will be introduced under the State Bank. In the proposed housing finance scheme, a subsidy will be given on the mark-up rate so that the installment payments are affordable for the borrowers.
However, the eligibility, types, name and structure of this scheme may be different from the previous scheme. Real estate valuation and engineering expert Ibrahim Amin says that the government has decided to introduce the housing finance scheme in the context of the gradual reduction in the policy rate and improvement in economic indicators.
He said that this scheme will not only reactivate economic activities in the construction and real estate sectors but will also attract investment from local and overseas Pakistanis. Karachi’s leading realtor Moaz Luqman said that Pakistan has a shortage of 1.2 million houses while the mortgage-to-GDP ratio is the lowest in the region, i.e. less than one percent.
He said that due to the high cost of land and construction, bookings for small and medium-sized apartments have decreased in the last few years, so the new subsidized housing scheme will also support builders and developers.
