LAHORE: The recent decision by the State Bank of Pakistan (SBP) to cut the policy rate to 12 per cent has been welcomed by CEO of Eighteen Housing Tarek Hamdy, who sees it as a catalyst for growth in the real estate sector.

The central bank has reduced the policy rate by a total of 1,000 basis points from 22 per cent in six intervals since June 2024, bringing it down to 12 per cent.

Hamdy expressed optimism about the move, emphasising its potential to boost investments in real estate. “This decision will encourage individuals to shift away from the traditional banking practice of keeping money in savings accounts and towards actively investing in real estate,” he remarked.

He further highlighted the challenges posed by previous policy rate hikes over the last two to three years, noting that higher rates had dampened business activity and investment interest. “Higher policy rates led people to favour safer options like savings accounts, which slowed down real estate transactions and overall economic activity,” he explained.

With the recent rate cut, Hamdy anticipates a resurgence in investor confidence and renewed interest in real estate as a viable investment avenue. Lower borrowing costs are expected to benefit both developers and homebuyers, fostering greater market participation.

“Easier financing terms will enable businesses to expand, create jobs and contribute to economic growth,” Hamdy added. “This cascading effect could pave the way for a robust and sustainable economic recovery.”