Latest news with #MeraPakistanMeraGhar
Express Tribune
27-06-2025
- Business
- Express Tribune
Govt plans new housing scheme
Listen to article With Pakistan's mortgage-to-GDP ratio abysmally low — below 1% — owing to the absence of a proper mortgage system, the federal government intends to launch a new subsidised housing finance scheme in the upcoming fiscal year. The initiative aims to spur demand in the real estate and construction sectors while making homeownership more accessible to middle- and lower-income groups. However, the scheme, loosely modelled after the earlier Mera Pakistan Mera Ghar programme, may face significant challenges, including a lack of clarity on eligibility and structure, persistently high land and construction costs, and limited affordability among target beneficiaries. Despite a Rs5 billion subsidy proposed in the 2025-26 federal budget, concerns remain over banks' willingness to lend aggressively, given Pakistan's mortgage-to-GDP ratio is still languishing below 1%. Experts caution that unless the scheme is backed by strong institutional coordination, tax reforms, and public awareness, it may fall short of its objectives — much like the previous attempt, where only Rs235 billion was approved out of Rs514 billion in financing requests. The State Bank of Pakistan (SBP) will oversee the rollout of the new scheme. While the proposed housing finance will subsidise a portion of the markup rate to make it affordable for beneficiaries, the eligibility criteria, categories, name, and structure may differ from the previous initiative. Ibrahim Amin, a real estate valuation and engineering expert, noted that the government is considering the launch of the housing finance scheme due to favourable conditions following a gradual reduction in the policy rate, which may decline further in the coming months if macroeconomic indicators improve. "The housing finance scheme will help revitalise economic activities in real estate, construction, and allied sectors, attracting local and foreign investments from residents and overseas Pakistanis while generating jobs across the entire ecosystem," said Amin, who is also the CEO of TriStar International, a real estate valuation company. He added that the scheme could improve sales of hundreds of unsold or undersold housing units in private residential societies across major cities, which have struggled due to rising inflation and declining purchasing power among target buyers. The government has also announced tax relief on property transactions, which may further stimulate the market in the coming months, Amin noted. The previous subsidised housing finance scheme, introduced in 2019 by the central bank, was discontinued by mid-2022 due to high interest rates. Despite overwhelming public responsewith participating banks receiving financing requests worth Rs514 billiononly Rs235 billion was approved across thousands of applications. "The banking regulator, alongside commercial banks, played a crucial role in facilitating the public through awareness campaigns, dedicated facilitation desks, and revised scheme conditions," Amin said. "The initiative also boosted economic activity in real estate and construction while providing long-term consumer financing opportunities for banks." He emphasised that Pakistan's banking system now has a well-tested and researched framework for housing finance, with stakeholders fully prepared to execute their roles. "It is high time for the government to announce the policy to benefit the masses," he remarked. Pakistan currently faces an estimated shortage of 1.2 million housing units relative to its population, while its mortgage-to-GDP ratio remains below 1%the lowest in the region. "Reviving affordable housing finance could play a crucial role in addressing both housing needs and broader economic recovery," said Karachi-based realtor Maaz Liaquat. He pointed out that high land and construction costs have dampened bookings for small and mid-sized apartments in major cities in recent years. The new subsidised financing scheme could support builders and developers of ready and under-construction vertical housing projects, attracting overseas Pakistanis and middle-income buyers. Liaquat suggested that the government collaborate with district authorities to streamline real estate regulations while reducing the tax burden on scheme beneficiaries to make homeownership more affordable for first-time buyers.
Business Recorder
12-06-2025
- Business
- Business Recorder
Housing scheme with SBP's help: Rs5bn set aside for mark-up subsidy
KARACHI: The federal government has allocated Rs 5 billion in the budget FY26 for a mark-up subsidy under a low-cost housing scheme, to be launched in collaboration with the State Bank of Pakistan (SBP) in the next fiscal year, aimed at enabling individuals to build homes through affordable credit. The federal government has announced a number of incentives and positive measures for the construction sector and housing sector in the next fiscal year budget. Previously, an affordable housing finance scheme titled 'Mera Pakistan Mera Ghar' was abruptly suspended in June 2022, by the federal government to cut the subsidy expenditures and since then, no new affordable housing initiative has been introduced. Housing finance schemes: Pakistan govt ready to offer 100% guarantees to banks Now, aimed to address the housing shortage in the country and support the housing and construction sector, Finance Minister Muhammad Aurangzeb has announced a new housing scheme in the upcoming budget. As per the budget proposals for FY26, a proportionate tax credit will be given on the profit paid on loans obtained for the construction or acquisition of a house measuring up to 250 square yards or a flat with an area of 2,000 square feet or less. Accordingly, an amount of Rs 5 billion has been allocated in the budget FY26 for mark-up subsidy for low-cost housing. In addition, Rs 1 billion has been allocated as subsidy to Naya Pakistan Housing Authority (NPHA). Experts have warmly welcomed the initiatives announced in the federal budget aimed at revitalizing the housing and construction sector, calling them timely, progressive, and essential for Pakistan's economic revival. Dr Anosh Ahmed, a US-based real estate consultant has applauded the government for recognizing the sector's critical role in national economic growth, employment generation, and industrial development. He noted that the construction industry serves as a backbone for numerous allied industries, including cement, steel, electrical equipment, and home furnishings. 'A strong construction sector leads to stronger industrial output and job creation across multiple value chains,' he said. He particularly praised the government decision to reduce the rate of withholding tax on property purchases from 4 percent to 2.5 percent, from 3.5 percent to 2 percent, and from 3 percent to 1.5 percent. He emphasized that these reductions will ease the financial burden on investors, builders, and homebuyers, making real estate transactions more viable and attractive. In addition, he welcomed the proposed abolition of the 7 percent Federal Excise Duty on the transfer of commercial properties, plots, and houses, calling it a decisive step toward removing structural barriers and encouraging real estate investment. 'The introduction of tax credits schemes would support middle-income families and encourage the development of low-cost housing schemes,' he added. He further endorsed the government's plan to promote mortgage financing through a comprehensive system, supported by a dedicated policy from the State Bank of Pakistan. Copyright Business Recorder, 2025
Business Recorder
05-06-2025
- Business
- Business Recorder
Better news
At its current pace, cement offtake this year is likely to end up roughly at the same level as last year. Domestic dispatches are estimated to have declined by around 6 percent, but total dispatches have been buoyed by a 24–25 percent rise in exports. Despite muted local demand, cement companies have remained largely profitable, thanks to strong domestic pricing and controlled coal costs. The upcoming budget, however, could bring even better news. After quietly dissolving former Prime Minister Imran Khan's flagship initiative—the Naya Pakistan Housing Development Authority (NAPHDA)—Prime Minister Shehbaz Sharif now appears poised to introduce a housing finance subsidy, echoing Mera Pakistan Mera Ghar (MPMG) scheme in structure, but likely introduced with less fanfare. In its four years of operation, NAPHDA had planned 156,000 housing units, of which only about 58,000 were completed. Of these, 31,000 were financed through MPMG. Given the original target of 5 million homes, progress has been disappointing. It's worth noting, however, that many of the projects under NAPHDA were not initiated by the authority itself but were pre-existing schemes absorbed into its portfolio. The current administration does not appear keen on launching a massive, centrally managed housing initiative—which, considering NAPHDA's bureaucratic pitfalls and Pakistan's fiscal constraints is probably wise. Instead, the government is planning a modest, targeted mark-up subsidy for 200,000 homes. That's a small and manageable start. Banks already have mechanisms in place to assess mortgage applications, owing to their experience with MPMG. According to BR estimates—since the SBP did not disclose borrower figures—approximately 78,000 mortgages were issued between 2020 and 2022, tied to Rs100 billion in loan disbursements (read: 'Now you see it, now you don't'). With limited data, it's difficult to assess the full impact of the scheme. But if Sharif's plan delivers financing for 200,000 homes through the formal banking channel, it would be more than double of what the MPMG ever achieved. And double is better, right? One cannot possible say. The fact is, whether a subsidy scheme will be impactful and add valuable output to the housing market or not, is a question for another day or another political era.. We will have to wait for the Budget 2026 announcement to see the exact modalities of the subsidy—who the scheme will target, and how it will be executed. What's certain increase housing credit will spur demand for construction materials, and cement stands to gain the most which the industry will undoubtedly welcome.
Business Recorder
02-06-2025
- Business
- Business Recorder
Think tank seeks tax exemptions for construction sector
ISLAMABAD: An Economic Thinktank has strongly recommended Federal Board of Revenue (FBR) to exempt construction sector from advance taxes and sales tax in coming budget (2025-26) to reduce the overall burden of transaction taxes on real estate sector. According to a report of Economic policy & Business Development think tank on 'Housing and Construction Sector-Challenges and Recommendations', it has recommended the FBR to reduce transaction taxes burden during buying and selling of immovable properties. This is needed to deal with the housing deficit with 10 million units and growing day by day. Around 72 allied industries of the real estate sector are operating at only 30-40% capacity. The report revealed that the FBR should also simplify tax on deemed income basis under section 7E of the Income Tax Ordinance 2001 and implement an expeditious dispute resolution system. Overall the Economic Thinktank has recommended rationalization of tax regime on the real estate sector for 2025-26. The government should also develop comprehensive town planning framework, it recommended. The real estate revival is as a key driver of economic growth keeping in view its ability to generate employment, address critical housing shortages, and sustain 40-50 allied industries. Thinktank pointed out that the Real Estate Regulatory Authority (RERA) has been establishment, but not fully functional. To address the market irregularities and lack of regulation in the real estate sector, National Assembly had passed the 'Real Estate Regulatory Authority Act (2020)' to regulate the real estate sector in Islamabad. It also recommended that revival of Mera Pakistan Mera Ghar scheme requires urgent attention. It recommended to establish operational RERA with immediate effect; implement online building approval system; create digital mortgage platforms; develop centralized property database; implement blockchain solutions for transparent transactions; promote modular/prefab construction and develop green building standards. Thinktank has further recommended creating vocational training institutes with NAVTTC and TEVTA; implement standardized wage structures; develop safety training protocols; launch programs to retain skilled professionals and promote gender-inclusive workforce initiatives. Copyright Business Recorder, 2025
