Pakistan needs to increase its exports to $100 billion by 2035 as part of a broader strategy to achieve greater economic self-reliance and move toward the vision of a $1 trillion economy. The proposed economic direction places significant importance on the real estate and construction sectors, with reforms aimed at expanding housing supply, increasing mortgage finance, improving construction processes and creating opportunities for investment and foreign exchange earnings. The approach also calls for a stronger role for the private sector in generating economic activity and developing Pakistani businesses for international markets.
The housing sector remains a major area of opportunity as Pakistan faces an estimated annual housing shortfall of around 450,000 homes. Demand is estimated at approximately 700,000 housing units each year, compared with a supply of only around 250,000 units. At the same time, the country’s urban population has expanded considerably, increasing from about 76 million in 2017 to 94 million in 2023. The combination of population growth, urbanisation and limited housing supply has increased pressure on cities and strengthened the need for reforms that can expand construction activity while improving access to housing.
The proposed housing, construction and real estate reform framework seeks to address the supply gap through an annual target of between 300,000 and 400,000 housing units under the House Ownership Plan for Everyone. The framework also aims to substantially expand mortgage financing by increasing it from below 0.5% of gross domestic product to 5% by 2035. A larger mortgage market could provide additional financing options for households while also supporting construction activity, provided that lending mechanisms and housing supply develop alongside one another.
Technology and digitisation are also central to the proposed reforms. The framework envisages digitising land records, construction permits, property valuations and transfer processes by fiscal year 2029. It also proposes one-window construction approvals to simplify procedures and reduce administrative delays. Incentives linked to verified construction milestones and secure escrow payments for property transactions are among the measures being considered to improve transparency and provide greater certainty to participants in the property market.
The construction sector has a wide economic footprint in Pakistan and supports around 72 allied industries while accounting for approximately 9.5% of national employment. The expansion of built-up areas across major cities further demonstrates the scale of urban development taking place. Between 2005 and 2022, built-up areas increased by 104% in Islamabad, 72% in Quetta, 59% in Lahore, 44% in Peshawar and 43% in Karachi. These changes have increased the importance of urban planning and raised questions about how future development can accommodate population growth without placing excessive pressure on available land.
The Planning Minister stressed that Pakistan needs to give greater attention to vertical development to make more efficient use of limited urban land and protect agricultural areas from unchecked horizontal expansion. Vertical construction could allow cities to accommodate additional residents and commercial activity within existing urban boundaries, while reducing the need for continued outward expansion. The minister also called for the modernisation of construction practices through the adoption of new technologies and more efficient building methods, which could improve productivity and contribute to the development of a more competitive construction industry.
Beyond meeting domestic housing requirements, the government wants the construction sector to contribute to exports, investment and foreign exchange earnings. The Planning Minister said the private sector must become the engine of economic growth and argued that construction should be developed as an industry capable of generating international business rather than remaining focused primarily on domestic demand. This would require Pakistani construction companies to develop stronger capabilities and establish a presence in overseas markets.
The minister pointed to the experience of Pakistani workers in the Middle East as evidence of the capabilities available within the country’s construction workforce. He said Pakistani construction companies should build on this experience and seek opportunities to establish a stronger international presence. Expanding construction-related services abroad could create another channel for foreign exchange earnings while providing Pakistani companies with opportunities to participate in international projects.
The broader export target of $100 billion by 2035 is therefore being linked with reforms across multiple areas of the economy, including housing, construction, real estate, technology and private-sector development. The proposed measures seek to address domestic infrastructure and housing requirements while creating conditions under which businesses can expand their activities and participate in international markets. The government also considers policy continuity and political stability essential for sustaining investment and economic development over the longer term.
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