Housing Finance in Zambia


This profile is also available in French here.

To download a pdf version of the full 2019 Zambia country profile, click here.

Zambia is a middle-income country located in the centre of southern Africa. It shares it borders with seven other southern African countries – Malawi, Angola, Tanzania, Zimbabwe, Botswana, Namibia and the Democratic Republic of Congo. Zambia has an urbanisation rate of 4.2% and this is expected to continue rising. The landlocked country has experienced rapid economic growth over the last decade and is Africa’s second largest copper producer. However, dependency on copper leaves the economy vulnerable to commodity price shocks.

Access to finance in Zambia is low, although mobile money services are improving financial inclusion measures. Zambia’s financial sector is made up of 18 banks and 129 institutions in the non-banking financial sector (including building societies and microfinance institutions).

Mortgage interest rates range between 20.75% and 28.50%. Mortgages are not a very strong product in the Zambian market. A lack of funding options for banks also make mortgage lending a difficult product. Unsecured home improvement and incremental home construction loans are a much stronger product. Despite high interest rates, these loans are smaller in size and the shorter tenor makes them more manageable for borrowers and lenders.

Zambia’s low average household incomes and high mortgage lending rates severely affect housing affordability.  It is therefore unsurprising that approximately 60 percent of the urban population resort to renting. At the top end of the residential market, rentals have been in decline due to an increase in the supply of units for high income housing consumers.

Government investment in housing programmes have largely targeted public sector employees. Public-private partnerships have been at the core of this housing delivery.

Zambia has also attracted significant property investment from international investors. This has been less evident in the residential property market, which represents the largest part of the Zambian market.

All land in Zambia is government owned, and land titles are generally attainable on 99-year land leases. Buying land is more common than buying a complete house in Zambia. Recently, there have been concerns around a proposal to revise the Lands Act and only give 25-year land leases to international investors.

In the Zambian market, investments in apartment buildings may provide attractive returns for many years. In addition, strong demand for serviced plots, housing microfinance through mobile money platforms and the provision of incremental housing finance are all opportunities in housing development and housing finance more broadly.

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

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2019 edition, which has up-to-date profiles for 55 African countries.

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