The federal government plans to launch a new subsidized housing finance scheme in the upcoming fiscal year to revive the real estate and construction sectors and expand homeownership among middle- and lower-income groups.
A Rs. 5 billion subsidy has been proposed in the 2025-26 budget, but concerns remain over banks’ participation and the scheme’s viability. Pakistan’s mortgage-to-GDP ratio remains below 1 percent, and the scheme may fall short.
The initiative resembles the discontinued Mera Pakistan Mera Ghar (MPMG) program, which was halted in mid-2022 after high interest rates hurt momentum.
Reviving subsidised housing finance could help address the country’s estimated shortfall of 1.2 million housing units and support broader economic recovery. However, without addressing structural bottlenecks and cost-related barriers, the scheme risks repeating the underwhelming outcomes of MPMG.