Islamabad: The Government is finishing a plan to introduce a subsidized housing scheme for income class and mortgage facilities for the middle class with the participation of commercial banks, starting with 200,000 low -cost housing units sponsored by the Government.
Prime Minister Shehbaz Sharif is expected to formally announce the scheme to relive the housing and construction sector, which is going through challenging times together with supposedly 72 associated industries, said an informed source. Sunrise.
The sources said that the Government would initially provide around 200,000 Low-cost Marla housing units in 3-5 after construction in the public sector to 50 % financing subsidy and then expand it. On Monday a draft of the plan was shared with the State Bank of Pakistan (SBP) and commercial banks.
The planning minister, Ahsan IQBAL, presided over Monday a meeting on affordable housing financing schemes to address the critical challenges that face the financing of long -term housing and explore models of viable policies for low -cost housing in Pakistan. The meeting was also attended by the Governor of SBP Jameel Ahmed, executive directors of the public and private sector banks and the representatives of the Pakistan mortgage refinancing company (PMRC).
The CEOs Chief and Commercial Bank of SBP searched for a week for their comments. At this stage, the government considered two options. First, the provision of 50 pieces subsidized funds to select people and offer them to build 3-5 houses from Marla independently. Second, the government could build such housing units in the public sector and deliver them to people with subsidized financing of 50 pieces. The interested parties would meet again next week.
The meeting indicated that Pakistan currently faces a serious home scarcity and a “paradoxical situation” for affordable homes. The current shortage was estimated at 12 million units, while the additional annual demand was around 700,000. In contrast, the annual supply was only 250,000. This meant an annual gap of approximately 450,000 units. This included approximately 65pc (approximately 292,500) deficit in the lowest income group, followed by 25PC or 112,500 per year in the lower average income group and the remaining 10 percent or 45,000 in high middle income groups.
It was considered paradoxical because there were challenges of affordability, limited access to finance, lack of mortgage financing and 64pc young people under 30 years on the demand side. On the other hand, the cost of the earth and the material was too high, there were high risk and low benefit margins, regulatory barriers and high interest rates and taxes on the supply side.
Participants reviewed the best international practices and mortgage models from countries such as Singapore, South Africa, Türkiye, Bangladesh, Brazil and India. They discussed the design of a practical and sustainable housing financing framework adapted to the socio -economic landscape of Pakistan.
The minister said that the lack of availability of long -term housing finances remained one of the most important barriers in the country for affordable housing. He recalled a substantial progress made in 2017-18, which unfortunately was interrupted by political instability. “When politics continuity is missing, the public has the cost,” he said.
Referring to the success of automatic lease models in the private sector, the minister questioned why a similar model could not be implemented for housing. “Millions of people live all their lives in rented houses. Being the owner of a house should not be a distant dream for the salaried class,” he said, adding that “a home of two or three million rupees cannot be built through global sum payments for an average income income.”
Ahsan Iqbal advocated a housing financing framework similar to automatic lease, backed by mortgages and backed by government policy.
Posted in Dawn, May 13, 2025
