ISLAMABAD: Following the recent announcement by the State Bank of Pakistan (SBP) to reduce the policy rate to 12 percent, Tarek Hamdy, CEO of Eighteen Housing, Thursday welcomed this decision, highlighting its potential to catalyze growth in the real estate sector.
The central bank’s policy rate, after being slashed by 1,000bps from 22% since June 2024 in six intervals, now stands at 12%.
In a statement here issued on Thursday, Hamdy expressed optimism about the lowered policy rate, emphasizing its positive implications for stimulating active investments in real estate. “This decision will encourage individuals to move away from traditional banking practices of parking money in savings accounts towards actively investing in real estate,” noted Hamdy.
Highlighting the impact of previous policy rate hikes over the last two to three years, Hamdy pointed out that these increases had adversely affected business activity. “Higher policy rates led to a decline in investment interest, as people preferred safer options like savings accounts,”. This trend resulted in a slowdown in real estate transactions and overall economic activity.
With the policy rate now lowered, Hamdy anticipated resurgence in investor confidence and renewed interest in real estate as a viable investment option. As the lower rates will make borrowing costs more favorable, thereby encouraging both developers and homebuyers to participate actively in the market.
Copyright Business Recorder, 2025
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