Pakistan’s real estate and construction sectors may witness renewed momentum following the government’s decision to expand the financing limit under the subsidised housing initiative Mera Ghar Mera Ashiana. The revised policy increases the maximum financing amount available to buyers while also lowering the cost of borrowing through reduced mark up rates. Industry experts believe these changes could encourage more individuals to purchase homes, improve housing affordability, and revive economic activity across construction related industries. As housing demand rises in major cities and urban populations continue to grow, the revised scheme is expected to support both property buyers and developers while addressing Pakistan’s persistent housing shortage.

Higher Financing Limit Aims to Expand Home Ownership

The Economic Coordination Committee recently approved significant revisions to the government backed housing finance scheme. Under the updated framework, the financing limit available to homebuyers has been increased from Rs3.5 million to Rs10 million. The revised policy also reduces the mark up rate for customers from 8 percent to 5 percent, making housing loans more affordable for middle income households.

Authorities have also expanded the eligibility criteria related to property size. Buyers can now obtain financing for houses up to 10 marlas in size or apartments covering up to 1,500 square feet. Policymakers say the objective is to align housing finance availability with current property market prices, which have increased significantly in recent years.

Housing finance experts believe that the higher financing limit could significantly increase participation in the scheme. Previously, the lower limit restricted many buyers from accessing the facility because property prices in major urban centers often exceeded the financing threshold. The revised limit may allow a larger segment of the population to enter the housing market.

Construction Sector Could Benefit from Increased Demand

Industry analysts expect the revised housing finance program to generate wider economic benefits beyond the real estate sector. Increased access to home financing can stimulate construction activity by encouraging developers to accelerate ongoing projects and initiate new housing developments.

When housing demand rises, the impact spreads across multiple industries connected to construction. Building materials such as cement, steel, glass, electrical equipment, and finishing products experience higher demand as more residential projects move forward. The construction sector also generates employment opportunities for engineers, architects, contractors, and skilled labor.

Real estate consultants believe that easier access to financing could help revive construction projects that slowed due to declining buyer affordability. Developers often depend on steady demand from homebuyers to maintain construction momentum. When financing becomes more accessible, it reduces uncertainty for developers and encourages investment in new housing supply.

Experts note that housing construction plays a significant role in Pakistan’s economic ecosystem because it activates a wide network of supporting industries, creating both direct and indirect employment opportunities.

Broader Access Could Support Middle Class Buyers

One of the primary objectives of the revised housing scheme is to expand home ownership opportunities for middle income households. Lower borrowing costs combined with higher financing limits can make property purchases more achievable for salaried individuals and families seeking long term housing solutions.

Real estate experts say the scheme may also encourage overseas Pakistanis to participate in the domestic property market by offering structured financing options. Many overseas buyers prefer regulated banking channels when purchasing property in Pakistan because they provide transparency and secure transaction processes.

The government has set a target of facilitating financing for approximately 500,000 housing units over the next four years. If implemented effectively, this objective could significantly reduce Pakistan’s housing deficit, which has remained a persistent challenge due to rapid population growth and urban migration.

In addition to expanding home ownership, housing finance programs can help strengthen Pakistan’s banking sector by encouraging individuals to engage with formal financial services such as mortgages, savings products, and consumer lending facilities.

Real Estate Developers Welcome Policy Changes

Representatives of the construction and real estate industry have welcomed the government’s decision to restructure the housing finance scheme. Developers believe that aligning financing limits with prevailing property prices was necessary to ensure that the program remains relevant to market conditions.

Industry leaders say the revised scheme could help absorb unsold housing inventory in several urban markets. Many developers currently hold completed apartments or housing units that have remained unsold due to limited buyer financing options. Expanding loan eligibility may enable more buyers to purchase these units, improving liquidity in the property market.

Developers also expect that plot owners who previously lacked financing options may now be able to construct houses on their land. This could generate additional construction activity and encourage housing societies to attract new buyers by promoting financing support available through the government backed scheme.

Market observers believe that once commercial banks begin implementing the revised financing structure, the property market may gradually experience an increase in buyer inquiries and property transactions.

Housing Finance Activity Shows Early Demand

Data from the initial phase of the housing program suggests that demand for government backed housing finance already exists. Since the scheme’s launch in September 2025, banks have received more than 10,000 loan applications representing financing requests exceeding Rs32 billion.

Although only a portion of these applications has been approved so far, financial institutions expect participation to increase once the revised financing limit becomes fully operational. Earlier housing finance initiatives in Pakistan also demonstrated strong demand, with loan applications worth hundreds of billions of rupees submitted within a short period.

However, experts caution that meeting the government’s ambitious target of financing half a million homes could be challenging if housing supply does not expand simultaneously. The availability of suitable residential units and new construction projects will play a crucial role in determining the success of the program.

Outlook for Pakistan’s Property Market

The expansion of housing finance under the Mera Ghar Mera Ashiana scheme could provide an important stimulus for Pakistan’s property and construction sectors. By increasing loan limits and lowering borrowing costs, the government aims to make home ownership more accessible while supporting economic activity linked to real estate development.

If implemented effectively, the policy could encourage greater housing demand, accelerate construction activity, and strengthen long term growth in Pakistan’s real estate market.