Banks to fund more housing units

12 Feb, 2018 - 00:02 0 Views
Banks to fund more housing units Dr John Mangudya

The Chronicle

Dr John Mangudya

Dr John Mangudya

Oliver Kazunga, Acting Business Editor
THE number of new housing units funded through mortgage financing by the banking sector is this year expected to rise by 103.7 percent to 11 611.

Last year, the banking sector advanced $172.08 million under the mortgage finance scheme for the construction of 5 700 houses across the country.

In the 2018 monetary policy statement presented last week, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said the provision of housing was a critical pillar in the infrastructure eco-system of an economy.

“In this regard, the Reserve Bank opened up the building society segment to allow other banking institutions such as commercial banks, to offer mortgages to deepen the sector.

“As at 31 December 2017, the banking sector funded a total of 5 700 new housing units valued at $172.08 million and is projected increase to 11 611 units valued at $365.63 million by December 31, 2018,” he said.

Statistics from RBZ show that out of the 5 700 new houses built last year, 3 843 were built in high density areas at a total cost of $53.3 million  while 910 were medium density houses at a cost of $42.8 million.

A total of 905 houses were also built in low density suburbs through mortgage financing to the tune of $57.5 million.

Data from the Central Bank further reveals that banking institutions will this year advance $207.9 million through mortgage for the construction of 7 975 houses in high density areas, $73.5 million for 2 820 medium density houses and 743 units in low density areas valued $57.3 million.

“It is encouraging to note that the highest number of housing units continues to be targeted at low income households in the high density areas.

“Significant imbalances, however, exist in the housing market, wherein demand outstrips supply and to this end, the banking sector plays a central role in bridging this gap.

“Against this background, banking institutions are urged to come up with innovative affordable mortgage funding models in order to meet the ever increasing housing demand,” said Dr Mangudya.

Zimbabwe has a housing backlog of 1.25 million and the country is working tirelessly to address the backlog. — @okazunga

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