Housing Finance in Malawi

Overview

This profile is also available in French here.

To download a pdf version of the full 2022 Malawi country profile, click here.

The share of Malawians living below the national poverty line only slightly declined from 51.5% in 2016/17 to 50.7% in 2019/2020. A lack of sustainable economic growth and recurrent shocks such as drought and flooding are some of the factors that hinder poverty reduction in the country. Increased demand for housing is caused by a rapid urbanisation rate of 4.1% and continues to put pressure on access to affordable housing.

Malawi’s anticipated 2021 gross domestic product (GDP) per capita was MK664 442 (US$643), up from US$636 in 2020. The domestic economy has shown resilience, with an expected 3.9% real GDP growth rate in 2021. Real economic activity is expected to fall to 1.7% in 2022, following lower-than-expected agricultural crop output due to unfavourable weather conditions during the 2021/22 growing season and electrical supply difficulties. However, because the majority of its essential building components, such as cement and bricks, have remained relatively stable, these developments have had little impact on the affordable housing market.

Malawi is building new homes for survivors of Tropical Storms Ana and Gombe. Malawi’s government has set goals for reducing disaster losses in its National Disaster Risk Management Policy (DRMP). However, the DRMP does not consider green housing applications or identify any effects on affordable housing.

As of May 2022, the monthly expenditure on basic needs and services for a six-person household in the capital city of Lilongwe was MK 272 338 (US$263). In the main urban centres, 30% of houses are owner-occupied and 60% are rented. Dwellers in the lower-end market who receive at least the minimum wage can afford rentals in this market and can afford to build either a traditional or semi-permanent house.

Mortgages in Zambia’s five commercial banks fell from 1,616 in 2020 to 1,405 in 2022. The minimum loan amount is MK10 million (US$9,672), payable over 240 months. The lowest mortgage rate is 19.9% per year, which is 6.1% higher than the standard rate, and the highest rate is 24.8% per year. Non-performing loans from commercial banks increased by 58% to MK161.9 million between 2021 and 2022. During the fourth quarter of 2021, commercial banks provided MK33 billion (US$31.91 million) in loans to the construction sector.

There are opportunities in Malawi’s housing finance sector to provide financial products for low-income borrowers. Following the 2018 Sustainable Construction Materials Regulations, which prohibited the use of burnt bricks, a market for environmentally friendly construction materials and technologies such as cement bricks was developed. There are also opportunities to supply green building materials.

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


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2022 edition, which has up-to-date profiles for 55 African countries.

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