Govt plans new housing scheme

With Pakistan's mortgage-to-GDP ratio abysmally low — below 1% — owing to the absence of a proper mortgage system, the federal government intends to launch a new subsidised housing finance scheme in the upcoming fiscal year. The initiative aims to spur demand in the real estate and construction sectors while making homeownership more accessible to middle- and lower-income groups. However, the scheme, loosely modelled after the earlier Mera Pakistan Mera Ghar programme, may face significant challenges, including a lack of clarity on eligibility and structure, persistently high land and construction costs, and limited affordability among target beneficiaries. Despite a Rs5 billion subsidy proposed in the 2025-26 federal budget, concerns remain over banks' willingness to lend aggressively, given Pakistan's mortgage-to-GDP ratio is still languishing below 1%. Experts caution that unless the scheme is backed by strong institutional coordination, tax reforms, and public awareness, it may fall short of its objectives — much like the previous attempt, where only Rs235 billion was approved out of Rs514 billion in financing requests.