Pakistan's construction sector rebounds as housing loan scheme boosts demand

Pakistan’s construction sector has moved back into growth, with activity rising 19.2% in the first quarter of FY26 and expanding 14.6% in the first half, according to State Bank of Pakistan figures reported by Profit. Builders attributed stronger housing demand partly to the government’s Ghar Ho Tu Apna programme, which provides subsidised loans of up to Rs10 million at a fixed 5% mark-up.

The programme, launched in September last year, is intended to widen access to home finance amid an estimated housing shortfall of about 10 million units. Public development spending also rose 41.8% in the first half of FY26, while builders said incomplete project approvals and property records are preventing many applicants from qualifying for bank loans. The sector’s recovery is relevant to property businesses and suppliers serving more than 70 construction-related industries, but affordability and formal financing remain constraints.