Housing Finance in Zimbabwe

Overview

This profile is also available in French here.

To download a pdf version of the full 2020 Zimbabwe country profile, click here.

The Zimbabwean economy has been characterised by an influx of imports, as opposed to export manufacturing, particularly because businesses source raw materials and equipment in foreign currency. As a result of COVID-19, many programmes planned for the year were shelved as resources were redirected to health-related expenditure, including water supply and sanitation programmes.[1]

Mortgage interest rates have mainly fluctuated between the 25 percent to 36 percent level from 2019 into 2020, despite rapid changes in the overnight accommodation rate. During the COVID-19 lockdown period in April 2020, the government promulgated deferment of rents and mortgage payments.

Mortgage finance is largely unaffordable and unavailable. Potential borrowers cannot always afford to raise deposits of an average 25 percent for housing loans and meet monthly instalments, especially with high interest rates and compressed repayment periods. Aspiring home buyers are also inhibited by inflationary increased in the cost of building materials. The COVID-19 lockdown also significantly reduced the flow of remittances into Zimbabwe, affecting housing affordability.

However, the demand for affordable housing continues to increase, spurred by rural-to-urban migration. In recent years, a number of projects undertaken by developers have sought to address the housing backlog, estimated at 1.3 million units in urban areas.[2] The existing stock of housing in this sector is largely inadequate, as many families share houses with lodgers, resulting in crowded and unhealthy living conditions. Six out of seven institutions in the country that are members of the African Union for Housing Finance (AUHF),[3] have been the main sponsors of large-scale, low-cost housing projects in urban centres in recent years and have constructed over 5 000 low-cost units in Harare, Bulawayo and Victoria Falls.

A new Human Settlements policy extends the scope of housing beyond urban centres to rural areas and also captures the government’s preference for vertical development of flats as opposed to stand-alone units.[4] Opportunities in Zimbabwe’s housing sector include rental housing, student accommodation, housing microfinance and modular construction methods.

 

[1] Zimbabwe Ministry of Finance and Economic Development (2020). The 2020 Mid Term Budget and Economic Review. 16 July 2020. (2020)  https://t3n9sm.c2.acecdn.net/wp-content/uploads/2020/07/2020-MID-YEAR-BUDGET-REVIEW-AND-ECONOMIC-REVIEW.pdf (Accessed 6 August 2020). Pg. 61.

[2] Zimbabwe Ministry of Finance and Economic Development (2019). The 2020 National Budget Statement. 14 November 2019. http://www.zimtreasury.gov.zw/index.php?option=com_phocadownload&view=category&id=54&Itemid=787 (Accessed 28 August 2020). Pg. 84.

[3] CBZ Bank Limited; CABS; FBC Building Society; National Building Society; ZB Bank Limited; Homelink Limited; Steward Bank Limited.

[4] Zimbabwe Ministry of Finance and Economic Development (2019). The 2020 National Budget Statement. 14 November 2019. http://www.zimtreasury.gov.zw/index.php?option=com_phocadownload&view=category&id=54&Itemid=787 (Accessed 6 August 2020). Pg. 85.

 

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

 


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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