Prime Minister Imran Khan on Wednesday launched the federal government's Naya Pakistan Housing Scheme, vowing to help the country's long-neglected stratum move from katchi abadis into swiftly constructed flats and high-rises.

The scheme was launched at an event held in Islamabad where Housing and Works Minister Tariq Bashir Cheema, Finance Minister Asad Umar and various other government officials were also present.

The prime minister, during his speech, explained that housing did not feature high on his priority list originally but an incident changed his way of thinking about the industry.

"My first priority was health, education and employment," the premier admitted. "But then I found out about a soon-to-be retiring government employee who was told that the only two ways his family could retain their government residence was if his son got inducted in the same department if he died while still a government employee.

"That man jumped off a building the next day," the prime minister said, adding that "it was then that I realised how difficult it is for the salaried class to gather funds needed for building houses".

"Pakistan needs 10 million homes but the salaried class does not have the money," he regretted.

The prime minister said that Pakistan's 210m strong population means that its housing sector is seen as an attractive market for investors.

"Investors are lined up to come in, while we're also trying to bring in the private sector and help young entrepreneurs and youth [enter the housing industry]," he said.

The prime minister said that the plan is to turn the country's slums into towering high-rises via a revolutionary new construction mechanism invented by the Chinese.

"No one had ever thought of what would happen to the katchi abadis [large urban settlements consisting of hovels]," he rued, noting that "40 per cent of Karachi's populace dwells in katchi abadis".

"But when one is in the pursuit of something, ways open up. A Chinese company has told me they they can make prefabricated homes and build one floor in just one week, so just imagine what they can do for us.

"We will give them land, they will swiftly construct flats, and all slums will get converted."

'Biggest economic project of Pakistan's history'

Earlier, Finance Minister Umar paid tribute to Housing Minister Cheema for his efforts regarding the project. "In my first five years in the National Assembly, we talked a lot and urged the housing minister but nothing was done," he recalled.

"But the incumbent minister, even though he is not from Islamabad — he has been elected from Bahawalpur — made a personal effort and has asked the government to approve a supplementary budget for this project."

The finance minister stressed the importance of the Naya Pakistan Housing Scheme, saying that "if the federal government even comes close to building 5m houses, it would be the biggest economic project of Pakistan's history."

Umar said that the housing industry is interconnected with 40-plus other industries, and so any growth in the former would also trigger development in the latter.

The minister said that "the housing sector would also contribute heavily towards another one of the federal government's promises: generating 10m jobs for the youth."

He reiterated that the government stays committed to facilitating both the lenders and borrowers in order to kickstart the housing industry — a fact that he said was signified by tax incentives given to banks that advance loans for low-cost housing.

He further said that a revolving fund worth Rs5bn has been approved, adding that the sum would be used to grant up to Rs20bn in loans to aspiring house owners.

One hundred and thirty five thousand houses will be built in the first phase of what is one of the federal government's flagship projects, RadioPakistan reported.

In the initial phase of the scheme, 110,000 housing units will be constructed in Balochistan for the fishermen of Gwadar, whereas 25,000 units will be built in Islamabad for government employees.