Home-ownership is considered a benchmark of stable living. Families living in their own houses lead a rather uniform life compared to those who don’t own their own homes. The financial status of homeless families is prone to deteriorate, psychologically they suffer, and more instability disturbs them further. According to the 7th Population and Housing Census 2023 (the most recent official data), approximately 7 million households in Pakistan live in rented homes. This represents 13.6% of total households in the country.
If we look at the biggest population-wise province, Punjab, the challenge is widespread. The rental rate in urban Punjab is significantly higher than the provincial average, driven by migration to major hubs like Lahore, Faisalabad, Rawalpindi, and Multan. Northern parts of Punjab sometimes show even higher concentrations of population (>30% in some areas per mapping).
Successive governments repeatedly announced grand state-led construction projects — from the Apni Basti scheme of the 1980s to the Ashiana project and the ambitious Naya Pakistan Housing Program — yet most delivered only a fraction of the target.
Imagine a big city neighbourhood in Lahore, Faisalabad or Rawalpindi, in every 100 houses you see, around 21 to 23 are rented, the families living there do not own them. In a village, you would struggle to find even 3 rented houses out of 100. This suggests that the lack of home-ownership is not an issue for the rural population but a serious concern for urban dwellers.
“Affordable Housing” is a term which is the talk of the town these days. It actually represents low-cost housing models, which can help bridge the widening gaps of housing shortage. Unfortunately, Pakistan’s housing history is littered with broken promises. Successive governments repeatedly announced grand state-led construction projects – from the Apni Basti scheme of the 1980s to the Ashiana project and the ambitious Naya Pakistan Housing Program – yet most delivered only a fraction of the target. These initiatives often suffered from cost overruns, corruption risks, unsuitable locations far from jobs, and elite capture, leaving many half-built structures and eroded public trust.
Learning from these repeated failures, governments now appear to have shifted strategy. Instead of the state directly building large housing colonies, the focus has moved toward transparent home financing models. In this new approach, families who already own land (or are provided with small plots) receive easy, interest-free or heavily subsidised loans. They then build or expand their own homes at their own pace and according to their needs. The government’s role is limited to releasing funds transparently through digital systems, with strong monitoring and high recovery rates, while avoiding the pitfalls of massive construction contracts.
Punjab’s Apni Chhat Apna Ghar (ACAG) program has emerged as the torchbearer of this new financing-led model. Launched in 2024, it provides interest-free loans of up to Rs 1.5 million, repayable in easy monthly instalments of around Rs 14,000-15,000 over 7-9 years. Families use the funds to construct homes on their pre-owned land. It is a mortgage financing model.
As of early 2026, the program has disbursed loans worth over Rs 164 billion to more than 120,000-130,000 beneficiaries. Around 80,000 homes have already been completed and occupied, while another 50,000+ are under construction. With a remarkable 99% recovery rate and nearly 1.9 million registered users, it demonstrates speed, transparency, and people-centric delivery. Through the companion scheme “Apni Zameen Apna Ghar”, those without any piece of land ownership can get a free plot in their name. Recently, 2000 such beneficiaries got free plot allotments across 19 districts of Punjab without even paying a penny.
This financing-first approach respects the reality that many Pakistanis, especially in Punjab, already own some land but lack construction capital. It reduces corruption risks associated with big contracts, creates local employment through self-construction, and empowers families to build homes suited to their needs and budgets.
A recent study by LUMS Consultancy Group (LCG), a distinguished student-led body, reveals that the Government of Punjab’s initiative, ACAG, is uplifting the lives of people by providing mortgage-based home financing. According to the study, 80% of the beneficiaries found repayments manageable. Furthermore, 100% of the beneficiaries reported an improvement in their standards of living. The study also cites some organic statements of the beneficiaries, one of which is worthy of attention: “Tenants are often looked down upon; this scheme has truly increased our social standing,” says Zulfiqar Ali (beneficiary). This statement represents a stark reality that families living in rented homes go through some tough socio-economic dilemmas. Tenants are never treated equally in their localities, owing to the nature of their stay, as it is largely established that they are not permanent residents. Moreover, temporary residence also impacts the education of children of such households, as they need to periodically relocate. The study also reveals that the average rent of a small house for one family ranges from 15000 to 25000 in urban centres across the province. This monthly payment makes it even harder to save money to start building a home. Under ACAG, the maximum instalment is 14,200 and that too with some attractive rebate policies in case of early payments.
This program is a light of hope for the already deteriorated housing market of Pakistan. However, the deficit of home-ownership is still looming, which needs to be controlled through concerted and acceptable efforts.
The writer is a public policy & governance model analyst from Lahore He can be reached at tallal.formanite @gmail.com