Housing Finance Slumps in FY23 as Govt Falls Short of Expectations

The financing provided by banks for purchasing and building housing units slumped in the current financial year, as the incumbent government failed to honor its commitment to resume the low-costing housing finance scheme, Mera Pakistan and Mera Ghar.

The Economic Survey for the financial year 2022-23 revealed that the banking industry’s financing to the housing sector witnessed meager growth of 7.0 percent (Rs 14.1 billion) during July-March FY23 against a significant growth of 64.3 percent (Rs. 66.6 billion) in last year.

“Housing and construction finance decelerated amid a rise in the cost of construction, a temporary halt in fresh disbursements under the Mera Pakistan Mera Ghar scheme, rising domestic policy uncertainty, and a slowdown in the transactions of property and construction activities,” the survey stated.

The incumbent government announced discontinuing the scheme of Mera Ghar and Mera Pakistan scheme last year but also assured that the disbursement will continue for the cases approved by the banks, and the financing under applications will be entertained after the revision of the rates.

The financing rates were revised for Tier 3 and Tier 4 categories of the scheme with the upward revision of the KIBOR rates.

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