Housing Finance in Mozambique


For the French version of this country profile, click here.

To download a pdf version of the full 2018 Mozambique country profile in English or Portuguese, click here.

Mozambique is a very low-income country on the East Coast of Southern Africa. One third of the population lives in cities. With an urbanisation rate estimated at 3.81 percent per annum, however, this proportion is expected to increase in line with urban growth patterns across the continent.

Housing affordability in Mozambique is severely constrained. Construction costs are estimated to be 30 percent higher than in neighbouring South Africa, as a result of higher material costs, low labour productivity and high financing costs. A small percentage of construction materials are locally manufactured; most materials are imported from South Africa, Portugal and China.

While the minimum wage was revised in April 2018 to MZN 4 142 (US$69) a month, the majority of the population earns less than US$100 a month. Banks offering mortgages have a minimum loan amount of MZN300 000 (US$5 000), which is far out of reach of the majority, yet still far less than the cheapest house in the market.

FFH estimates a housing deficit of two million units and over 13.5 million people that require housing. The equivalent of 2.5 million families, or 60 percent of the Mozambican population, live in substandard housing; approximately 70 percent of households in Maputo live in informal housing.

There is very limited investment by the private sector in the low-cost housing sector, as investors prefer high-end projects.  Potential developers are also put off by the need to build supporting transport and services infrastructure for new sites and the lack of government support for low-cost housing schemes. Over the years, there have been some promising public-private partnership arrangements, but these have not reached expectations, neither in quantum nor affordability.

Mozambique’s property market is dominated by the fact that the state owns all land. The registration and cadastre systems still only cover limited urban areas. This limits the amount of formally financeable land through mortgages and contributes to a general lack of clarity on property titles.

The resale property market is limited. Apart from the fact that secondary sales are difficult due to the protracted procedures and consents necessary because of leasehold tenure, owners also avoid the risk of forfeiting current rights in the process of sale (fearing, for example, that the title may be questioned).

There are a wide range of opportunities for both public and private sectors to strengthen the development of housing finance, as well as increase its supply. Possible initiatives include expanding tailored housing loan products to low income groups and introducing innovative and competitive incremental self-build housing solutions. The growing microfinance industry offers potential for the growth also of housing microfinance, to support incremental housing delivery and the provision of starter plots by the FFH. With rising building materials, opportunities exist regarding the use of alternate approaches, technologies and local materials that could help to reduce the need for imported building materials and speed up the delivery of affordable housing.

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

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2018 edition, which has up-to-date profiles for 54 African countries.

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