Lahore: Demand for real estate and property prices have risen in major cities across Pakistan in recent weeks, with market observers attributing the trend to renewed investor confidence, geopolitical tensions in the Middle East, lower taxes on property transactions and the government’s subsidised housing finance programme, according to a news post.
Market observers estimate that residential property prices have increased by 10% to 15% in recent weeks, particularly in Karachi, Lahore and Islamabad, as buyers and investors return to the domestic real estate market.
According to experts, geopolitical tensions in the Middle East, along with lower taxes on property transactions, had encouraged local and overseas Pakistanis to invest in the country’s real estate sector. Investors are diversifying their portfolios amid regional uncertainty and shifting investments towards Pakistan’s property market.
Reportedly, residential projects in high-end localities have recorded increased demand amid limited supply, contributing to higher prices. These investors view real estate as a relatively secure long-term investment compared with some regional markets.
Experts also attributed part of the increased demand to the government’s housing finance programme, which offers subsidised financing to eligible buyers and has made homeownership more accessible for some middle-income households.
Under the Finance Act 2025-26, the federal government reduced withholding taxes on property transactions. The withholding tax on property purchases for tax filers was reduced from 2.5% to 1.25%, while the tax on property sales was cut from 5.5% to 2.75%.
Karachi has also seen a notable rise in property prices due to strong demand and limited supply of new housing projects, with buyers increasingly showing a preference for completed housing units over newly launched residential developments.
In Lahore and Islamabad, investors are purchasing properties in developed housing schemes and high-rise residential projects. Among the first-time buyers, the government’s Apna Ghar housing finance programme to purchase homes in suburban areas -through bank financing is much popular.
According to State Bank of Pakistan (SBP) data, banks had so far approved housing finance worth PKR 204 billion under the Prime Minister Apna Ghar Scheme, while financing amounting to PKR 27 billion already been disbursed. The government aims to facilitate 150,000 beneficiaries under the programme during the current fiscal year.
Industry stakeholders have called for further measures to facilitate builders and developers, including improved access to bank financing and supportive policies to encourage new residential projects. They said expanding housing supply could help address Pakistan’s estimated housing shortage of around 12 million units while supporting employment and economic activity in allied industries.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
