Govt explores sustainable housing finance model for Pakistan

May 13, 2025 (MLN): To explore effective policy models for affordable housing and tackle key challenges in long-term housing finance, Federal Minister for Planning, Development, and Special Initiatives, Mr. Ahsan Iqbal, chaired a high-level meeting.

Minister Ahsan Iqbal underlined the lack of long-term housing finance as a major barrier to affordable housing, recalling progress made in 2017–18 that was later halted due to political instability.

He emphasized the cost of policy discontinuity and highlighted the success of auto-leasing in Pakistan, questioning why a similar approach hasn’t been applied to home ownership.

“People spend their whole lives in rented accommodation. A home shouldn’t be an unattainable dream for the salaried class,” he remarked, noting the impracticality of lump-sum payments for homes valued at two to three crore rupees.

He proposed a government-supported mortgage system modeled after auto-financing, backed by strong regulatory frameworks and guarantees.

“We are prepared to offer 100% guarantees to banks to protect their investments,” he assured.

Member Infrastructure Waqas Anwar presented the Planning Ministry’s proposed financial framework, while it was also noted that Punjab is preparing to launch a separate housing initiative.

To align legal and regulatory measures, the Planning Ministry will consult with Law Minister Azam Nazeer Tarar, as per the press release issued.

Calling for market-led solutions, Ahsan Iqbal urged private banks to adopt housing finance mechanisms without hesitation, pledging full state backing.

“Crafting a workable housing finance model is achievable. We must customize proven models from other countries,” he said.

He further suggested that the government offer targeted subsidies for small housing units like three-Marla homes, while leaving larger housing categories to be addressed by market-driven bank models.

The Minister stressed that this approach could spark a significant transformation in Pakistan’s housing landscape, contributing to economic growth, infrastructure advancement, and social development.

The session, attended by senior officials including Planning Secretary Awais Manzoor Sumra, State Bank Governor, PIDE Vice Chancellor Nadeem Javed, CEOs of private banks, and representatives from PMRC and Nationwide Bank of Pakistan, focused on formulating a sustainable housing finance framework.

Participants examined international housing finance models from countries such as Singapore, South Africa, Turkey, Bangladesh, Brazil, and India.

The review centered on tailoring global best practices to Pakistan’s socio-economic context.

Banking sector representatives welcomed the proposals and showed readiness to collaborate on an actionable financing structure.

Concluding the meeting, Ahsan Iqbal stated, “This is more than a policy goal it is a national economic and social necessity.”

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