The Centre for Affordable Housing Finance in Africa has recorded the cheapest newly -built house by a developer in Mozambique as selling for USD 16 169. If, theoretically, a bank were to offer a mortgage at an interest rate of 19 percent, with a 25 percent deposit and a term of 25 years, only 1.7 percent of Mozambican households could afford to purchase and finance this house. In reality, most developers build houses that cost significantly more than USD 16,169, and few banks would offer a mortgage on such terms. This has resulted in few mortgages in the country, with only 2.99 percent of outstanding loans in April 2016 being for housing, and 1.62 percent in 2014 being for mortgages. Considering these statistics, access to housing finance is clearly a challenge in Mozambique. Further, it seems that Mozambicans are financing and constructing their housing through alternative means: some formal, some informal, but all poorly understood. The high housing backlog and the poor housing conditions of a significant majority of households in Mozambique suggest that the current housing finance arrangements are less efficient and effective than they could be.
This qualitative research project collected detailed housing investment chronicles from a sample of households who have invested in their housing over time. It has retrospectively chronicled how they have invested, and still plan to invest, the financial tools they’ve used, and the reasons for their particular housing investment decisions.