For anyone planning to finance a home or a plot, the cost of borrowing is set by one number: the SBP policy rate. The State Bank of Pakistan has kept its policy rate unchanged at 11.5%, holding steady as it watches inflation. Here is what the decision means, where rates may head next, and how it affects property buyers.
SBP holds the policy rate at 11.5%
At its June 2026 meeting, the Monetary Policy Committee (MPC) of the State Bank kept the policy rate at 11.5%, adopting a cautious, hawkish stance. This followed a 100-basis-point increase at the previous meeting. The pause signals the bank wants to see inflation clearly cooling before easing. (Always confirm the current policy rate with the SBP, as it is reviewed regularly.)
The inflation backdrop
The hold comes as inflation has climbed again. Headline inflation rose through the spring, and the MPC expects it to stay in double digits for the next few months before gradually easing. Higher energy and transport costs have been key drivers.
| Indicator | Reading | Note |
|---|---|---|
| SBP policy rate | 11.5% | Unchanged (hold) |
| Headline inflation | double digits | Expected to ease later |
| FX reserves | approx $17-18bn | Rising |
| GDP growth FY26 | 3.7% | Up from 3.2% in FY25 |
What a high policy rate means for property buyers
A higher policy rate makes home and construction financing more expensive, because mortgage and loan rates are linked to it. In the near term that can cool leveraged demand. But it cuts both ways:
- Cash buyers gain an edge, as financed competitors face higher costs.
- Rate holds add predictability, making it easier to plan a purchase.
- When inflation eases and rates eventually fall, financed demand and prices often pick up.
- Real assets like plots remain a popular hedge against inflation.
This links directly to affordability. Alongside the recent real estate tax relief and a broader market rebound in 2026, a stable rate environment supports confidence. For the wider economic picture, see how Pakistan’s economy grew 3.7% in FY26.
What to watch next
The key trigger is inflation. If it falls back toward single digits, the SBP has room to cut, which would lower financing costs and typically boost property demand. Buyers who position early – in approved, well-located projects – are often best placed when the cycle turns.
For long-term value that tends to outpace inflation, many investors choose a plot in the best housing society in Rawalpindi.
Frequently asked questions
What is the current SBP policy rate?
The State Bank has kept its policy rate at 11.5%. It is reviewed regularly, so confirm the latest rate with the SBP.
Why did the SBP keep rates unchanged?
The MPC held rates to keep pressure on inflation, which it expects to remain in double digits for a few months before easing.
How does the policy rate affect home buying?
It sets the base for mortgage and loan rates. A higher rate makes financing costlier; when rates fall, financed demand and property prices often rise.
Is it a good time to invest in property?
Many investors use higher-rate periods to buy real assets as an inflation hedge and to position ahead of the next easing cycle – after doing their own due diligence in approved societies.
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