Govt plans to raise mortgage finance to 5% of GDP by 2035

The government has proposed raising mortgage finance to 5% of gross domestic product (GDP) by 2035 from below 0.5% currently, alongside plans to build 300,000-400,000 housing units annually under a new housing reform framework, the Planning Ministry said on Wednesday.

The proposals on housing, construction and real estate reform framework were presented by Member Planning Commission Waqas Anwar during a meeting of the eighth National Economic Mission under the “Uraan Pakistan” framework, held under the chairmanship of Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal.

The presentation also envisaged digitising land records, permits, valuations and transfers by FY2029, alongside one-window construction approvals, incentives linked to verified construction milestones and secure escrow payments for property transactions.

Addressing the meeting, focused on the promotion of the housing, construction and real estate market, Ahsan Iqbal said Pakistan must activate every sector of the economy to achieve the vision of a $1 trillion economy.

He said the real estate and construction sectors were the backbone of any economy, as they were linked with multiple industries and generated significant employment opportunities.

The presentation highlighted that construction supports 72 allied industries and accounts for approximately 9.5% of national employment.

He noted that Pakistan faced a serious housing challenge, with population growth increasing demand while a large segment of the population remained without adequate housing facilities.

During the meeting, it was learnt that Pakistan’s urban population increased from approximately 76 million in 2017 to 94 million in 2023. Annual housing demand was estimated at 700,000 units against a supply of 250,000 units, leaving an annual shortfall of approximately 450,000 homes.

The minister emphasised the need to promote vertical development and better utilise limited land resources, while protecting agricultural land from unchecked horizontal expansion.

Figures presented at the meeting showed that built-up areas increased by 104% in Islamabad, 59% in Lahore, 43% in Karachi, 44% in Peshawar and 72% in Quetta between 2005 and 2022.

Ahsan said Pakistan needed to modernise construction practices by introducing new technologies, innovation and more efficient building methods.

He highlighted Pakistan’s strong pool of skilled and technical human resources, noting that Pakistani workers had demonstrated their capabilities in the construction sector across the Middle East. However, he said Pakistani construction companies must also build a strong international presence and compete in global markets.

The minister stressed that the public and private sectors must work together to build a stronger economy. He emphasised that the construction sector should not remain limited to meeting domestic requirements but must also be developed as a source of exports, investment and foreign exchange earnings.