The federal government is set to launch a new subsidised housing finance scheme in FY2025-26 to improve homeownership access for low- and middle-income groups and revive activity in the real estate and construction sectors.Â
A Rs5 billion subsidy has been proposed in the budget to support the scheme, which will involve partial markup subsidies to reduce borrowing costs for eligible households.
The State Bank of Pakistan (SBP) will oversee the programme, which follows the discontinuation of the Mera Pakistan Mera Ghar initiative in 2022.
Officials said the structure, eligibility, and naming of the scheme are still being finalised. While lower policy rates provide favourable conditions for its rollout, experts warn the programme will require strong institutional support, tax reforms, and borrower awareness to succeed.
Pakistan’s mortgage-to-GDP ratio remains below 1%, among the lowest in the region, due to the absence of a broad-based mortgage system.Â
Real estate experts noted that the scheme could help address unsold inventory in housing projects and support job creation across related sectors. They added that the easing of interest rates and tax relief on property transactions could make the housing market more attractive to domestic buyers and overseas Pakistanis.
One realtor recalled that the earlier scheme launched in 2019 saw Rs514 billion in financing applications, but only Rs235 billion was approved due to interest rate hikes and banking constraints. Despite its premature end, the initiative helped develop institutional capacity and frameworks for housing finance.
Pakistan is currently facing an estimated housing shortfall of 1.2 million units. Realtors believe that the new scheme could support vertical housing projects in major cities and ease access to housing for first-time buyers if paired with tax incentives and streamlined regulations.
