Housing Finance in Malawi

Overview

Malawi has a limited housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.

The lowest recorded interest rate on a mortgage in Malawi is 34 percent, as of September 2016, and requires at least a 20 percent down payment. And, the average mortgage size in Malawi is US$ 17 632. The cheapest newly built house by a developer recorded by CAHF is US$ 21 097, which is for a 180 square metre unit. Cement prices are slightly lower than the continental average, at US$ 9.14 for a 50-kilogram bag.

With an urbanisation rate of 4.12 percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken as the current average microloan size is only US$ 703s. The Decent and Affordable Housing Subsidy Program (DAHSP) was launched by government in 2014. By March 2016, the project had disbursed US$ 7.9 million across the country for the first phase, which saw 12 508 houses improved. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Malawi can afford.

Find out more information on the housing finance sector of Malawi, including key stakeholders, important policies and housing affordability:

 


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2016 edition, which has up-to-date profiles for 51 African countries.

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