The political and economic instability of recent years in Zimbabwe has led to infrastructure and regulatory deficiencies, and the housing backlog is estimated to be 1.3 million units and growing. Although the financial sector remains well developed in comparison to some regional peers, the access to credit is still poor, with less than 3 percent of the working age population having an outstanding home loan, compared to the broader SADC average of 5.7 percent.
Foreign investment in the country is low, likely reflecting the uncertain economic outlook and perceived investment risk. A large portion of the foreign inflows have come from the US, UK, or from the African Development Bank. Of the small fraction of investments allocated to the housing sector, investors prefer to invest in equity or debt of the banks and building societies for financing mortgage lending. The new government has spoken of plans to alleviate the demand-side and supply-side obstacles to the provision of affordable housing, but international investors are likely to wait until there is clear evidence of improvements to the investment environment.
The stark funding gap for housing projects, estimated by the Infrastructure Development Bank of Zimbabwe (IDBZ), highlights the urgent need for institutional investment in the housing sector.Download PDF