Government Housing Loans Boost Real Estate Sector Amid Ongoing Crisis

KARACHI: The real estate sector in Pakistan is experiencing a resurgence, largely driven by government housing loans aimed at stimulating construction and addressing a significant housing shortage. Builders report a marked increase in activity over the past year, despite banks’ reluctance to extend loans without complete documentation.

According to Hassan Bakhshi, chairman of the Association of Builders and Developers (Abad), the Prime Minister’s housing scheme, which offers loans of up to Rs10 million with manageable repayment plans, has injected much-needed liquidity into the market. He noted, “Most people can’t buy even an apartment since the purchasing price is out of reach of the middle class. The housing scheme has provided liquidity and purchasing has picked up.”

Pakistan faces a daunting housing crisis, with estimates suggesting a need for up to 10 million homes. This comes at a time when nearly 48% of the population lives below the poverty line, and construction costs have surged dramatically over the last five years. The government’s initiative is seen as a crucial step towards alleviating these pressures and making housing more accessible to the middle class.

As the construction industry begins to recover, stakeholders are hopeful for continued support from financial institutions. However, challenges remain, particularly concerning the legality of many ongoing projects, which has made banks cautious in their lending practices. The future of the housing market will depend on both regulatory reforms and sustained government support.