Ask five people how Pakistan's property market is doing right now and you will get five confident answers. Ask them for a number and the confidence evaporates.
That is not their fault. Pakistan has no official house price index. The Pakistan Bureau of Statistics publishes a house rent index inside CPI, but there is no state-published, methodologically transparent measure of what residential property actually costs. Every headline you read about a "property boom" is built on listing prices, agent sentiment, or tax collection totals — each of which measures something slightly different from the thing being claimed.
So we went and assembled what is verifiable. Below are the numbers that survived sourcing, with the caveats attached. Some of them contradict the prevailing story.
1. There is no national boom. There is a split market.
The single most important finding: 2026 price movement is sharply divergent by city. Anyone telling you "Pakistani property is up" is averaging away the actual signal.
Average house prices, year-on-year (Zameen.com price index, listing-based)
| City | Reference month | Average price | YoY change |
|---|---|---|---|
| Karachi | May 2026 | PKR 8.65 crore | +17% |
| Multan | Apr 2026 | PKR 3.16 crore | +12% |
| Faisalabad | Mar 2026 | PKR 3.88 crore | +6% |
| Peshawar | May 2026 | PKR 5.50 crore | +3% |
| Rawalpindi | Jun 2026 | PKR 3.77 crore | +1% |
| Lahore | May 2026 | PKR 4.89 crore | 0% |
| Islamabad | Jun 2026 | PKR 9.36 crore | −3% |
Residential plots tell an even more extreme version of the same story: Karachi plots +38% (Mar 2026), Gujranwala plots +19% (Jun 2026), Lahore plots +12% (Jun 2026).
Two things to hold in mind. First, these are asking prices from listings, not registered transactions — sellers' hopes, not settled deals. Second, the reference month differs by city, so this is not a clean like-for-like snapshot. Directionally useful; not audit-grade.
The most defensible cross-city series we found is PACRA's May 2025 sector study, which put FY24 house prices at PKR 34,300/sq ft in Islamabad, 19,800 in Lahore, 19,600 in Karachi, 18,700 in Rawalpindi, 16,600 in Faisalabad, 13,900 in Gujranwala and 11,700 in Multan — with Islamabad compounding at 16.9% a year over FY20–24 and Lahore at only 8.7%.
Note what has changed since: the city that led the last cycle is the one now printing a negative number.
Why Islamabad turned: in February 2026, FBR cut its official valuation rates across 68 Islamabad locations by 30–50% under SRO-163 — E-7 from PKR 600,000 to 225,000 per square yard, F-6/F-7 from 500,000 to 210,000. When the government's own valuation of your neighbourhood halves, asking prices follow.
2. Property lost to gold and to the stock market
This is the number most likely to be left out of a sales pitch.
Between January 2024 and February 2026, Karachi's DHA and Clifton residential plots rose 25–50%. Apartments rose 10–40%. Bungalows on 500–1,000 square yards rose 10–25%. DHA flats went from PKR 20,000 to 28,000–30,000 per square foot.
Over the same window, gold rose roughly 140% and the KSE-100 rose roughly 177%.
Real estate did not lose money. It lost the race, badly, against two far more liquid assets — while carrying transaction costs, illiquidity and title risk that neither gold nor equities impose. If your investment thesis is "property always outperforms in Pakistan," the last two years are direct evidence against it.
3. The tax reset: the seller's bill was halved
The Finance Act 2026, effective 1 July 2026, is the largest reduction in federal property transaction tax in recent memory. Slabs are gone; flat rates replace them.
| Measure | FY2025-26 (filer) | FY2026-27 (filer) |
|---|---|---|
| Section 236C — advance tax on sale | 4.5% / 5.0% / 5.5% by value slab | 2.75% flat |
| Section 236K — advance tax on purchase | 1.5% / 2.0% / 2.5% by value slab | 1.25% flat |
| Section 7E — deemed income on property | Applied at 20% | Abolished |
| Late-filer category and surcharge rates | Applied | Abolished |
Section 7E's removal follows a Federal Constitutional Court ruling holding it ultra vires. Worth knowing: no refund mechanism was enacted for 7E already paid.
Capital gains treatment is unchanged. Property acquired on or after 1 July 2024 is taxed at a flat 15% for persons on the Active Taxpayers List at disposal, with a 0% rate once the holding period exceeds one year. Property acquired before that date keeps the old holding-period taper.
Provincially, Punjab moved too: a Stamp Duty (Amendment) Ordinance signed 7 April 2026 set a single 1% rate for urban and rural transfers, down from 1% urban / 3% rural. Note carefully — the widely repeated "3% to 1% cut" applies to rural transfers only.
What the collection data shows. FBR's FY2025-26 provisional numbers: total property withholding tax PKR 278bn, up 17% year on year. Section 236C collections rose 62% to PKR 191bn; section 236K collections fell 27% to PKR 87bn — exactly what you would expect from a year that raised the seller rate and cut the buyer rate. For scale, Pakistan's salaried class paid PKR 630bn over the same period, more than double the entire property sector.
4. Money is finally moving — from a very low base
Pakistan's mortgage market has been, functionally, a rounding error. That is beginning to change.
- Housing finance outstanding: PKR 267.09bn at end-June 2026, +29% year on year — after two consecutive years of contraction from a June 2023 peak of PKR 212.32bn.
- Mortgage-to-GDP: 0.3%. Stated on the record by the Secretary, Ministry of Housing and Works, to the National Assembly Standing Committee on Finance on 8 May 2026. Mortgages are 0.56% of total private-sector credit.
- SBP policy rate: 11.50%, held at the 27 July 2026 MPC — the second consecutive hold after a surprise 100bp hike in April 2026, the first increase in nearly three years, driven by prolonged Middle East conflict and energy costs. The easing cycle is over for now.
- Private-sector credit: PKR 11.16trn, +15.38%. Auto finance +38%. Construction-sector credit PKR 236.15bn, +12.27%.
On the scheme everyone is asking about. Mera Pakistan Mera Ghar is no longer accepting new financing — SBP has published no MPMG data since 30 June 2022, when it stood at 514,490 applications and PKR 99.82bn disbursed. It has been superseded by Mera Ghar – Mera Ashiana, also branded Wazir-e-Azam Apna Ghar and referred to officially as the PM Apna Ghar Programme. Maximum loan raised from PKR 3.5m to PKR 10m, tenure up to 20 years, 5% fixed markup for the first 10 years, 90:10 LTV, and a mandated 15-working-day credit decision.
Uptake, as at 29 July 2026: PKR 204bn approved, PKR 27bn disbursed. That is a 13% conversion from approval to money in hand — and PKR 204bn of scheme approvals against a total system housing-finance book of PKR 267bn means most of it has not yet reached a balance sheet. The FY27 subsidy allocation is PKR 71bn against a target of 150,000 homes by June 2027.
For context on how much scepticism that target deserves: the Naya Pakistan Housing Programme targeted 5 million houses in 2018 and delivered 21,980 low-cost units by mid-2022 — 0.44% of target.
5. Rents are rising faster than they were. Yields are disputed.
House rent inflation, July 2026 (PBS, base 2015-16=100): urban +6.12% (index 183.56), rural +7.78% (index 195.20). Headline national CPI was 9.20%. Two years ago urban rent inflation was running at 4.9% — so rent growth has accelerated while headline inflation has come down.
Gross rental yields are where the data gets uncomfortable:
| City | Gross yield (listings-based, Q1 2026) |
|---|---|
| Islamabad | 7.16% |
| Karachi | 7.14% |
| Rawalpindi | 6.64% |
| Lahore | 5.74% |
| National average | 6.67% |
Smaller units yield far more: Karachi one-bedroom units show 11.16% gross, against 5.23% for four-bedroom-plus.
The contradiction we are not going to hide. In February 2026, the vice-president of DEFCLAREA told Dawn that Karachi residential rental returns run at "0.25% per month and 3–4% per annum" — roughly half the figure above. The gap is almost certainly asking rents on listings versus actually-contracted rents on prime DHA and Clifton stock, and gross versus net. Budget on the lower number and treat 6–7% as a ceiling, not a base case.
6. Real construction activity is decelerating
Prices and sentiment can drift. Cement and concrete cannot.
Construction sector GDP growth, FY2025-26 (PBS quarterly national accounts):
| Quarter | Construction growth |
|---|---|
| Q1 | +15.93% |
| Q2 | +6.42% |
| Q3 | +0.48% |
Cement dispatches show the same shape: H1 FY26 +13.11%, full-year FY26 +7.21% (50.515m tons, of which domestic 41.507m tons +9.5% and exports 9.008m tons −2.19%), then +6.02% in July 2026.
Steel corroborates the cooling: rebar prices fell to PKR 220,000–230,000/tonne by January 2026 from PKR 240,000–270,000 a year earlier — a price decline signals soft demand, not cheap inputs.
Read together: domestic construction is still growing, but the momentum peaked in the first quarter of FY26 and has been decaying since. Full-year GDP came in at 3.70%, with the economy at US$452.1bn and per capita income at US$1,901.
7. The demand-side numbers are the real story
Everything above is cyclical. This is structural.
A World Bank working paper using satellite data and the degree-of-urbanisation method puts Pakistan's true urban population at 88% — against 39% under official census classification. Islamabad: 47% official versus 90% measured. Khyber Pakhtunkhwa is roughly three times its official 15%. Pakistan's urban classifications have not been meaningfully updated since 1972.
That single reclassification changes the size of the addressable market, the location of demand, and — as the World Bank notes — explains a great deal about why municipal property tax revenue is so suppressed.
On supply: a May 2026 KSBL InsightLab policy brief estimates a cumulative deficit of over 10 million units and annual demand of roughly 1 million new units, with the top 20 high-density districts accounting for 42% of annual demand on 5% of national land. Karachi's districts, per the same brief, have "virtually no developable space left."
One caveat on the most-quoted number in Pakistani real estate: the "10 million shortfall" figure is a business-school think-tank estimate, not an official government or World Bank statistic. SBP's own 8-million-unit backlog figure dates to June 2010. Treat both accordingly.
Meanwhile the money keeps arriving: workers' remittances hit a record US$41.6bn in FY2025-26, up 8.6% — Saudi Arabia, the UAE and the UK leading. Roshan Digital Account gross inflows reached US$13.365bn cumulatively by June 2026 across 900,000-plus accounts, of which US$8.435bn was utilised inside Pakistan. No credible source publishes what share of either flow goes into property, and anyone quoting one is guessing.
What to actually do with this
If you are buying. Transaction tax is at a multi-year low — 1.25% advance tax on purchase, 7E gone. Financing is cheaper in real terms than it has been, and if you qualify for PM Apna Ghar at 5% fixed for ten years while rent inflation runs at 6%, the arithmetic favours you. But you are buying into decelerating construction activity, so do not underwrite on continued double-digit appreciation.
If you are selling. Your section 236C bill fell from 5.5% to 2.75%. If you have been sitting on a sale, the tax argument for waiting has largely evaporated.
If you are investing. Two years of underperformance against gold and equities is real, and yields may be nearer 4% than 7% net. The credible case is a rental-yield and structural-demand case in high-density urban locations — not a capital-gains case.
Everywhere: the divergence between Karachi at +17% and Islamabad at −3% means city-level averages are close to useless for a decision. What matters is the specific sector, the specific phase, the specific development status. That is precisely why we built Marinsh as a map-first platform — because the thing that determines your price is location at a resolution no national index will ever capture.
Methodology and sources
Every figure above carries its period and source. Where sources conflict — rental yields, and the exact section 236K rate — we have said so rather than picking the more convenient number. Where a widely circulated figure does not trace to a primary source, we have flagged it.
Figures we deliberately did not publish, because no credible source exists: per-marla price series for any city, national or provincial property transaction volumes (not published by FBR or any provincial land authority); and the share of remittances directed into real estate.
Primary sources: Pakistan Bureau of Statistics (Quarterly National Accounts Q3 FY2025-26; Monthly Price Review July 2026); State Bank of Pakistan (Monetary Policy Committee, 27 July 2026; housing finance data); Federal Board of Revenue (Budget 2026-27 salient features; SRO-163 of 2026; SRO 650–662(I)/2026); Ministry of Finance (Economic Survey 2025-26); All Pakistan Cement Manufacturers Association; World Bank; PACRA Real Estate Sector Study, May 2025.
Press and advisory: Business Recorder, Dawn, Express Tribune, Profit by Pakistan Today, The Nation, ProPakistani, KPMG Taseer Hadi, PwC A.F. Ferguson.
Published 4 August 2026. Figures current as at that date. This is market information, not tax or investment advice — confirm your own position with a qualified adviser before transacting.