Pakistan requires more than 12 million houses to meet growing demand, with the housing sector experiencing negative growth. Builders anticipate a revival in construction activity as liquidity from banks, driven by falling interest rates, is expected to flow into the real estate market.
Developers believe that an upturn in the housing sector will benefit over 70 allied industries, generate employment, and contribute to economic growth.
According to a news report, Association of Builders and Developers (ABAD) Chairman Hassan Bakhshi, who recently met with Prime Minister Shehbaz Sharif, said the prime minister acknowledged their proposals but stressed the need for real construction activity instead of speculative trading.Â
He added that the prime minister requested revised proposals within ten days, expressing a willingness to support the sector, particularly for low-income families.
Bakhshi pointed out that despite the cement industry operating at only 30% capacity, local prices remain significantly lower than in the Middle East. He emphasized that long-term subsidized financing is necessary to revive housing development, recalling that during the previous government, over 31,000 houses were financed at fixed subsidized rates.
However, banks remain cautious, arguing they cannot sustain large-scale long-term financing without government intervention. Builders insist that the state should cover higher interest costs to make housing loans viable. The absence of a strong mortgage financing system limits homeownership opportunities, as many potential buyers cannot secure loans on terms that match rental costs.
Bankers warn that large-scale long-term financing carries significant default risks, making it an unattractive option compared to risk-free investments in government bonds, which continue to yield record profits for the banking sector.
