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Housing

Pakistan Government to Introduce Subsidized Housing Scheme and Mortgage Facilities

Strategic Insights

— 2 min read

The Pakistani government is preparing to unveil a new housing scheme aimed at providing subsidized housing units and mortgage facilities for low- and middle-income individuals. Prime Minister Shehbaz Sharif is expected to announce the plan, which has been in the works since a draft was shared with the State Bank of Pakistan and commercial banks on Monday. The initiative aims to address the country's severe housing shortage, with an estimated 12 million units needed to meet current demand. The government has two options in mind: either providing 50% subsidized funding for individuals to construct their own homes or building public sector housing units and offering them on 50% subsidized financing.

Key Takeaways:

  • The government is finalizing a plan to introduce a subsidised housing scheme for the lower-income class and mortgage facilities for the middle class.
  • The scheme will start with 200,000 low-cost government-sponsored housing units.
  • Prime Minister Shehbaz Sharif is expected to formally announce the scheme to revive the housing and construction sector.
  • The current housing shortage in Pakistan is estimated at 12 million units, with an additional annual demand of 700,000 units.
  • The annual supply of housing units in Pakistan stands at 250,000 units, resulting in an annual gap of 450,000 units.
  • The government has reviewed international best practices and mortgage models from countries including Singapore, South Africa, Turkey, Bangladesh, Brazil, and India.

Statistics:

  • 12 million: the estimated number of housing units needed to meet current demand in Pakistan.
  • 700,000: the annual demand for housing units in Pakistan.
  • 250,000: the annual supply of housing units in Pakistan.
  • 450,000: the annual gap between demand and supply of housing units in Pakistan.
  • 64%: the percentage of Pakistan's youth population below the age of 30.
  • 65%: the percentage of shortfall in the lower income group.
  • 25%: the percentage of shortfall in the lower middle-income group.
  • 10%: the percentage of shortfall in the upper middle-income group.

Sources:

  • A meeting was held on Monday presided over by Planning Minister Ahsan Iqbal to address the critical challenges faced in long-term housing finance.
  • The meeting was also attended by SBP Governor Jameel Ahmed, chief executive officers of private and public sector banks and Pakistan Mortgage Refinance Company (PMRC) representatives.
  • An informed source told Dawn that the government is finalizing a plan to introduce a subsidized housing scheme for the lower-income class and mortgage facilities for the middle class.
  • State Bank of Pakistan (SBP)
  • Pakistan Mortgage Refinance Company (PMRC)
  • Dawn

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