Low-cost Housing

The construction boom is visible as the market is flooded with developers and new projects. Land prices are booming, and the perception is that the construction amnesty scheme has been captured by the elite. The activities in land trading are fuelled by speculation. Although policy incentives have encouraged banks to focus on house finance, the affordability for the middle class is simply missing. The other problem is the lack of low-cost housing which was supposed to be the focus of the PTI government's housing policy. The SBP announced a subsidy for low-cost and affordable housing in October 2020. The subsidy financing was divided into four tiers, including the one for the Naya Pakistan Housing and Development Authority (NAPHDA) where there was an additional Rs 300,000 per unit subsidy on principal. The programme was revised again in March 2021 with additional incentives such as an increase in loan amount for different tiers to respond to rising housing prices. Now a maximum loan of Rs 10 million can be taken for a house of up to 10 marlas (250 square yards) or an apartment of 2,000 square feet.