Islamabad, June 27, 2025: The federal government is introducing a new subsidized housing scheme in Pakistan with a proposed Rs5 billion subsidy in the FY2025-26 budget to boost homeownership among low- and middle-income groups.
The initiative is expected to revive the sluggish real estate and construction sectors, which have faced stagnation since the discontinuation of the Mera Pakistan Mera Ghar scheme in 2022.
Under the new plan, the State Bank of Pakistan (SBP) will manage the scheme’s rollout. The model will offer partial markup subsidies to reduce loan costs, making housing loans more affordable for eligible citizens. Final details on the scheme’s name, eligibility criteria, and operational structure are still being finalized.
Experts believe that falling interest rates and SBP’s involvement in housing finance 2025 offer a supportive environment for the scheme’s success. However, analysts warn that robust institutional backing, transparent tax reforms, and strong borrower awareness are crucial for long-term impact.
Pakistan’s mortgage-to-GDP ratio remains under 1%—one of the lowest in South Asia—highlighting the urgent need for broad-based mortgage access.
Industry insiders say this scheme could unlock stalled housing inventories and stimulate job creation in allied industries. If paired with property tax incentives and policy clarity, the move could also attract interest from overseas Pakistanis.
A real estate veteran recalled that the 2019 housing scheme received Rs514 billion in loan applications, but only Rs235 billion was approved due to policy and banking hurdles. Still, it laid a strong foundation for housing finance frameworks now being revived.
With a housing shortfall of 1.2 million units, the upcoming scheme is expected to support vertical housing projects in major cities, especially for first-time home buyers.
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