Pakistan plans to sharply increase mortgage financing and boost housing construction as part of a new reform framework aimed at tackling the country’s growing housing shortage.
The government has proposed raising mortgage finance to 5 percent of gross domestic product (GDP) by 2035, from below 0.5 percent currently, according to the Planning Ministry.
The framework also targets the construction of 300,000 to 400,000 housing units each year, alongside reforms designed to make the housing, construction and real estate sectors more efficient.
The proposals were presented by Planning Commission Member Waqas Anwar during the eighth meeting of the National Economic Mission under the Uraan Pakistan framework. The meeting was chaired by Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal.
The proposed reforms include digitising land records, permits, property valuations and transfers by FY2029. The government also plans to introduce one-window construction approvals, incentives linked to verified construction milestones and secure escrow payments for property transactions.
Ahsan said Pakistan must unlock the potential of every major sector to achieve its long-term goal of becoming a $1 trillion economy.
He described construction and real estate as key parts of the economy because they support many other industries and generate employment.
The construction sector supports 72 allied industries and accounts for about 9.5 percent of national employment, according to figures presented at the meeting.
Pakistan’s housing shortage has become more serious as its urban population continues to expand. The number of people living in urban areas increased from around 76 million in 2017 to 94 million in 2023.
Annual housing demand is estimated at 700,000 units, compared with a supply of only 250,000 units. This creates a yearly shortfall of around 450,000 homes.
Ahsan called for more vertical development to make better use of limited land and reduce the pressure caused by unchecked horizontal expansion. He also stressed the need to protect agricultural land.
Built-up areas expanded significantly between 2005 and 2022, rising 104 percent in Islamabad, 59 percent in Lahore, 43 percent in Karachi, 44 percent in Peshawar and 72 percent in Quetta.
The minister also called for modern construction methods, greater use of technology and more innovation.
He said Pakistan’s skilled workforce had already demonstrated its capabilities in Middle Eastern markets. Local construction companies, he added, should now expand internationally and make the sector a source of exports, investment and foreign exchange.
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