Pakistan Plans New Housing Finance Scheme for Low and Middle-Income Groups

Pakistan: The federal government of Pakistan is preparing to introduce a subsidised housing finance scheme in the 2025–26 fiscal year to support homeownership for low- and middle-income households and stimulate activity in the real estate and construction sectors. A proposed subsidy of PKR 5 billion (USD 18 million) has been included in the federal budget to fund partial markup subsidies aimed at lowering borrowing costs. The State Bank of Pakistan will administer the scheme, which follows the discontinuation of the Mera Pakistan Mera Ghar programme in 2022. The final structure, eligibility criteria, and name of the scheme are yet to be confirmed. 

Experts have indicated that the initiative could address unsold housing inventory, encourage job creation across related industries, and improve access to housing, especially in urban areas. However, they also emphasised the need for institutional support, tax reforms, and borrower education to ensure its effectiveness. Pakistan’s mortgage-to-GDP ratio remains below 1%, highlighting the limited reach of housing finance in the country. With an estimated housing shortfall of 1.2 million units, stakeholders believe the new programme could assist first-time buyers and support vertical housing developments if combined with policy incentives and regulatory simplification. 

Source: Pakistan Today