Islamabad: Business leaders and industry stakeholders have welcomed the government’s newly introduced housing mortgage finance initiative, terming it a positive step toward expanding home ownership opportunities in Pakistan. However, they have also called for key policy adjustments, including an increase in the loan limit to PKR 30 million to better reflect rising construction costs.
Gohar Ejaz, former caretaker federal minister and chairman of the Economic Policy and Business Development think tank, praised Prime Minister Shehbaz Sharif for launching the mortgage housing finance scheme. He said the initiative is a step in the right direction for supporting middle-class families in acquiring homes while also stimulating economic activity through increased participation of the private housing and construction sectors.
Ejaz described mortgage financing as “the biggest support for the middle class hoping to own a house or an apartment in a lifetime,” adding that it can serve as a foundation for inclusive economic growth. However, he stressed that the current framework needs revision to align with market realities.
He noted that the proposed financing limit of PKR 10 million is insufficient, even for a four-marla house in major urban centres where the scheme is expected to operate. He urged the State Bank of Pakistan to adopt a broader policy approach and allow private sector housing finance companies, regulated by the Securities and Exchange Commission of Pakistan, to participate in the scheme.
According to Ejaz, large commercial banks may not be able to effectively serve small borrowers at scale, which could limit the scheme’s outreach and impact. He also called for increasing the financing ceiling to PKR 30 million and formally integrating private developers into the framework to improve accessibility for middle- and lower-middle-income groups.
“Private developers should be made part of this scheme to facilitate customers and ensure better delivery of housing solutions,” he said, adding that private sector participation could improve efficiency in loan disbursement and project execution.
SM Tanveer, Patron-in-Chief of the Federation of Pakistan Chambers of Commerce and Industry, also welcomed the initiative but emphasized the need to reduce the markup rate from 5 percent to zero for low- and middle-income segments to make housing finance more affordable.
Stakeholders noted that Pakistan faces a significant housing shortage, with mortgage penetration among the lowest in the region. They said a strong housing finance system, supported by private sector participation, could unlock economic activity due to the construction sector’s linkages with more than 40 allied industries.
Industry experts further highlighted that expanding mortgage access could help formalise the real estate sector, improve documentation, and increase tax revenues. However, they cautioned that simplified procedures, digitised land records, and stronger legal protections for lenders and borrowers would be essential for wider adoption.
Ejaz reiterated that the success of the initiative will depend on inclusivity and effective execution. He said that aligning financing limits with actual construction costs and integrating private sector players could significantly enhance the impact of the scheme.
While the business community largely supports the government’s direction, stakeholders emphasised that timely reforms—particularly increasing the loan cap, reducing borrowing costs, and widening participation—will determine whether the initiative becomes a transformative policy for Pakistan’s housing sector.
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