Housing Finance in Zimbabwe

Overview

This profile is also available in French here.

To download a pdf version of the full 2021 Zimbabwe country profile, click here.

Zimbabwe’s economy witnessed 3.9% growth in June 2021 based on a combination of a good agricultural season, slowing inflation, and businesses adjusting to the pandemic restrictions.1 COVID-19 rendered more people jobless, reduced the pace of housing projects execution, and hindered the rate of economic recovery. The Zimbabwe Government managed to complete 569 low-cost units out of the 2 000 units for the first quarter of 2021 under its National Development Strategy 1 (NDS1). While the housing backlog continues to hover above 2 million, the government recently demolished settlements and unregistered business stalls/shops in and around Harare, including those in Melfort and Chitungwiza, as a demonstration of its zero tolerance for informal settlements. The major challenges faced in low-income housing delivery include inadequate budget allocation, elitist housing standards, economic instability, insufficient and inefficient housing delivery programs, and high interest in capital finance.

Housing construction in Zimbabwe has largely relied on alternative funding because mortgages remain unaffordable and unavailable. Average mortgage lending rates rose from around 25% per year as of June 2020 to between 40% and 55% per year as of 30 June 2021. The exchange rate also moved from US$1: Z$57.35820 (30 June 2020) to US$1: Z$85.4234 (30 June 2021)., Black-market foreign exchange currency rates have given rise to multiple pricing for commodities. Most sellers of properties and capital goods prefer hard currency thereby excluding low-income participants.

The government has multiple plans to alleviate the housing shortage but is failing to keep up with rising demand. For instance, roads are enablers of economic activities and housing development alike, and the reactivated Emergency Roads Rehabilitation Plan in April 2021 has covered up to 791km. This has targeted marginalised areas such as Rushinga, Binga, and Boli -Sango Kanyemba.

[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 2021 edition, which has up-to-date profiles for 55 African countries.

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