Govt loans turn out to be stimulant for real estate

Dawn reports that Pakistan’s construction sector has improved over the past year as subsidised government housing finance brought more buyers into the market. The Prime Minister’s Ghar Ho Tu Apna scheme, launched in September last year, offers financing at a fixed rate of 5 per cent, while the government covers the markup subsidy. Builders say the funding helped buyers purchase homes and allowed some developers to recover money tied up in unsold apartments.

The recovery has coincided with a 41.8pc rise in Public Sector Development Programme spending in the first half of FY26, while construction growth reached 19.2pc in the first quarter. However, banks remain cautious about lending against projects lacking complete approvals and documentation. Property values in Karachi rose, including increases of up to 60pc in Defence Society, before a reported correction of up to 20pc there over the past month.