Tanzania Mortgage Market Update, 30 September 2018

The Tanzania mortgage market registered an increase of 29 percent following a marginal decline in the second quarter of 2018, according to the Mortgage Market Update released on 30 September 2018 by the Bank of Tanzania (BOT) and the Tanzania Mortgage Refinance Company Ltd. (TMRC).

The outstanding mortgage debt as of 30 September, 2018 was TZS 428.65 billion (US$ 187.3 million), with the average mortgage debt estimated at TZS 81.94 million (US$ 35,802). The ratio of outstanding mortgage debt to GDP was 0.41 percent, compared to 0.32 percent as at 30 June 2018.

Tanzania’s housing demand is estimated at 200,000 houses annually, and the affordable housing segment is still constrained due to high interest rates. Prospects for the housing sector are however projected to improve, particularly due to the increase in the number of lenders over the decades; the delivery of housing by key State developers, most notably the National Housing Corporation (NHC) and the Watumishi Housing Company (WHC). Some of the key urban areas receiving majority of this investment are Dar es Salaam, Morogoro, Mwanza and Dodoma.

Tanzania’s mortgage market has benefited significantly from the presence of the Tanzania Mortgage Refinance Company (TMRC), which, through the availing of long-term funds for pre-financing and re-financing, enabled lenders to provide more mortgages into the market, extend loan terms, and lower interest rates. Additionally, the TMRC has invested in other long-term financiers (GEPF Retirement Benefits Fund and PPF Pensions Fund) at market rate while supporting the creation of the Housing Microfinance Fund (HMFF) which extends long-term lending to lower-income earners who were previously underserved.

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