The federal government is planning to roll out a new low-cost housing scheme in the upcoming fiscal year, aiming to boost homeownership and inject life into Pakistan’s slowing real estate and construction sectors.

Under the proposed budget for 2025–26, the government has allocated Rs. 5 billion as a subsidy to support affordable housing loans for middle- and lower-income groups. The idea is to help more people own homes while stimulating economic activity in a sector that has faced significant slowdowns due to high inflation and rising construction costs.

The plan comes at a time when the mortgage-to-GDP ratio in Pakistan remains under one percent, among the lowest in the region. That’s a major challenge. Most banks have shown reluctance in offering home loans due to perceived risks and a lack of demand. Without their cooperation, the scheme could fall flat.

This isn’t the first attempt either. The government’s previous program, Mera Pakistan Mera Ghar (MPMG), saw limited success before being discontinued in 2022 as interest rates soared and fiscal pressure mounted. While MPMG helped some first-time buyers, it couldn’t maintain momentum when economic conditions worsened.

This new scheme appears to follow a similar pattern but without addressing the structural problems that held back the earlier program. Unless the government also tackles issues like high construction costs, slow approvals, and limited financing channels, experts worry the scheme may meet the same fate.

Still, the intention is clear: support families who dream of owning a home and give the property sector a much-needed push. Whether this attempt gains traction depends not just on subsidies but also on how practical, accessible, and well-supported the financing model turns out to be.