ISLAMABAD – The federal government is finalizing a plan to launch a subsidized housing scheme for low-income families, aiming to ease Pakistan’s severe housing shortage. The initiative will begin with the construction of 200,000 affordable housing units in partnership with commercial banks.
According to official sources, the government will initially offer homes in the public sector at a 50% subsidy. These will be 3- to 5-marla units, with plans to gradually expand the scheme. The State Bank of Pakistan (SBP) and several commercial banks received a draft proposal earlier this week to review and provide feedback.
At a high-level meeting chaired by Federal Planning Minister Ahsan Iqbal, stakeholders discussed long-term financing models for affordable housing. Participants included the SBP Governor, CEOs of public and private banks, and representatives from the Pakistan Mortgage Refinance Company (PMRC). Banks have requested one week to finalize their input on the financing structure.
The government is considering two main options: either offering selected individuals funds with a 50% subsidy to build their own homes, or constructing housing units in the public sector and providing them to the public through subsidized financing. The next meeting with stakeholders is expected next week to finalize the plan.
Currently, Pakistan faces a shortage of nearly 12 million housing units, with annual demand for 700,000 new homes but a supply of only 250,000. Most of the shortfall affects low- and lower-middle-income groups, highlighting the urgent need for affordable housing solutions.
Minister Ahsan Iqbal emphasized that the lack of long-term housing finance is one of the biggest hurdles to homeownership. He proposed adapting successful leasing models from the private sector to housing finance, arguing that salaried individuals should not have to spend their entire lives in rented homes.