ABAD for subsidized financing to address housing crisis

Pakistan is currently grappling with a housing deficit of over 12 million units as demand continues to outstrip supply.

The Chairman of the Association of Builders and Developers (ABAD) stated that Prime Minister Shehbaz Sharif appreciated their proposals but opposed speculative property trading. He requested revised suggestions within 10 days and expressed support for low-income housing projects.

The ABAD chairman highlighted that despite low cement industry output at 30%, property prices in Pakistan are still much lower than in the Middle East. He called for long-term subsidized financing, similar to the previous government’s initiative that financed 31,000 houses at fixed rates from 2018 to 2022.

However, banking experts argue that large-scale financing is not viable due to Pakistan’s underdeveloped mortgage market. While home financing could allow buyers to pay in installments like rent, banks remain hesitant due to high default risks.

Despite potential benefits, banks are still reluctant to offer long-term housing loans, limiting growth in the real estate sector.