Pakistan has a housing stock of 32 million units and a demand for 10 million additional units (The Nation,2022). The coalition government has to build 0.5 million housing units annually to fill the housing gap. Keeping in view the need to improve the availability of adequate housing in the country, the former government introduced a low-cost housing scheme, Mera Pakistan Mera Ghar (MPMG). This scheme enables banks to provide financing for the construction and purchase of houses at meagre financing rates for the population’s low to middle-income segments.
Under the MPMG scheme, banks have received more than Rs338 billion in housing applications. However, the banks have approved financing of Rs148.45 billion, out of which Rs53 billion have already been disbursed (The News,2022). According to data, about 21,980 low-cost houses have so far been completed, while 52,439 are under construction and 95,084 are in their planning phase. In Budget 2022-23, the current government approved Rs 500 million for the low-cost housing scheme, which was hardly enough to fulfil the subsidy demand of a mere 16,000 to 17,000 under-construction housing units for one year.
Later, the government paused further disbursements under the Mera Pakistan Mera Ghar (MPMG) scheme until August 31, 2022. According to some officials, the reason behind this decision is that the government is considering reviewing/revising features of the subject scheme in light of recent developments in the macroeconomic scenario. Furthermore, the Finance Ministry has clarified that disbursements made until June 30, 2022, will be released under MPMG.
However, Currently, Pakistan is facing a shortage of around 12 million housing units due to high demands for houses rather than supply. (Express Tribune, 2022). In such an environment, a lack of financing options will restrain people from owning homes, as paying the upfront cost of the house is very difficult for the average person.
Leave a Reply