A total of $98,7 million mortgage loans were advanced to clients in the seven months to July 2018, an industry official has said.
The figure is 44,3 percent more than the $55 million which was extended in the same period last year last year.
According to Ambrose Matika, executive secretary for Zimbabwe Association for Housing Finance which represents 10 institutions that provide mortgage finance, “Of the $98,7 million availed, $71,5 million (72,4 percent) financed construction of 1 133 new dwellings whilst $27,3 million (27,6 percent) was lent for purposes of acquiring and enhancing 264 existing units”.
This comes as one of the country’s largest cement manufacturers, Lafarge says increased mortgage financing could be one of the key factors in the increase of housing projects. Lately, most banks including Stanbic, NMB, and Nedbank are now offering home improvement and equity release loans and as such, individual housing projects have risen.
Lafarge’s interim company secretary Flora Chinhaire highlighted growth in the construction industry to the growing number of mortgage facilities and the increased number of people with growing disposable incomes.
“It is expected that housing projects will continue to grow on the back of the increased access to mortgage financing and Government supported initiatives such as Command Agriculture, which are improving individual access to disposable income,” said Lafarge.
“Gradual improvement in the investment attractiveness of the country is also expected to enable the Government to secure funding for new low cost, affordable housing projects and infrastructure,” she said.
This development, coupled with resumption of road rehabilitations across the country, has seen high demand of cement on the market.
Following the boom in the informal sector, some financial service providers have stepped in with mortgages for the low to middle income earners, as well as civil servants as part of efforts to provide affordable funding for the market that has for years been excluded.
Financial services groups such as GetBucks and the People’s Own Savings Bank (POSB), have also launched mortgage facilities to cater for the informal sector, civil servants and the low income earners while other mortgage lenders have increased tenure to 25 years from 10 years.
This is expected to help ease the ballooning national housing backlog, estimated at 1,2 million units and nearly half a million for the capital — Harare — alone.