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Harare Bureau
ZIMBABWE bucked the mortgage interest rates trend, seen as a huge deterrent to housing finance, which prevailed in many African countries between 2015 and 2016 after seeing the rates decline from 12 to below 10 percent.

Mortgage rates are still high on average, for the countries covered in a recent survey. The interest rate averaged 12,74 percent in 2016 dropping by just 0,40 percent from 2015, and range from an incredibly high rate of 34 percent in Malawi in 2016, to a low of 2,5 percent in Gabon, also in 2016.

Nineteen African countries saw mortgage affordability decrease, as the average mortgage interest rate rose while the same number of countries had a decrease in mortgage interest rates, reflecting improving affordability.

Zimbabwe was among the countries that saw a decrease in mortgage interest rates, registering a weighty 3 percent during the period 2015 and 2016.

According to survey conducted by the Centre for Affordable Housing Finance (CAHF) mortgages are an important part of any housing finance system, and impact significantly on housing affordability, as well as on housing supply.

“Mortgage products are available in 46 of the 51 countries surveyed in the 2016 CAHF Housing Finance Yearbook – but their rates and terms vary widely and their practical availability is hard to tell,” CAHF said in its findings.

CAHF said while mortgages may be a significant part of the financial system in South Africa, most countries are only beginning to develop their markets.

For instance, CAHF said, Tanzania’s mortgage market is still very small, with 3 891 reported mortgages as of December 2016. In Malawi, the survey revealed, one bank reported that it had a total mortgage book of 17 loans. To understand mortgage market development, CAHF said it has been collecting data on mortgage interest rates, loan tenor and down payment requirements of the countries, where this data is available, for the past few years.

For Zimbabwe, the data shows that mortgage interest rates, unlike in other African countries out of the 52 covered by CAHF’s survey, actually dropped from an average of 12 percent annum to below marginally 10 percent.

CAHF said the average loan tenor for the countries surveyed was 18 years in 2016 dropping by one year from 2015.

Eight countries had an increase in average loan tenor and a quarter saw the average loan tenor decline.

Findings on Zimbabwe showed that the country recorded a significant increase in the mortgage loan tenor, after the period increased to 25 years from 18.

But the down payment required increased to 15 percent from 10 percent.

Ten countries had a decrease in the down payment required for a mortgage and seven have had an increase.

On average, the down payment was 18 percent in 2016 up from an average of 17 percent in 2015.