Profiling and Understanding the Residential Rental Market in Mozambique

This research was commissioned by the Centre for Affordable Housing Finance in Africa (CAHF) in partnership with Financial Sector Deepening Mozambique (FSDMoç), to highlight the importance of Mozambique’s rental market and to support the development of a research and data agenda that supports the sector. The key objective of the research was to explore and quantify the residential rental market, focussing on the affordable market.

Mozambique’s rental market can be considered small, with six percent of the national population and 13 percent of urban residents living in a rented house. However, at a city level, over 23 percent of Maputo’s households (or approximately 54 000 households) rented a house in 2017 – a statistic comparable to other African capital cities. The rental housing market is expected to grow as a result of limited land for low cost housing, limited provision of on-site basic infrastructure for own construction, and increased transport costs as the distance between dwellings and city centres increases. Critically, rental housing markets must confront the issue of affordability, in view of the limited incomes of the majority of the population.

This report sheds light on a number of demand and supply side dynamics of Mozambique’s rental housing market, which is primarily driven by the private sector. It highlights some of the challenges and opportunities in the sector, and finds the following:

• There is a need for a housing policy with an increasing focus on the rental market, to support rental market growth.
• Low income, informal rental housing in urban Mozambique is a dynamic, yet neglected sector. This market requires increasing housing stock through public, private partnerships, tenant protection through associations, a strengthened legal and regulatory framework to improve dwelling conditions and poor access to basic services, and financial sector involvement in financing landlords to purchase new rental properties and construction finance products.
• A concerted effort is required to address data gaps for informed decision making, interventions and investments in rental. A continuous flow of data in the low end market is essential for informing a structured and comprehensive rental policy, yet the informality of the sector renders this as challenging.
• Improving collection, monitoring, analysis and formulation of policies necessitates developing and maintaining a network of sector players that regularly provide data on rental market activities.

Further research would be useful for understanding Mozambique’s rental market more holistically. Two immediate areas include (i) the informal rental market and (ii) the data ecosystem.

This research was co-funded with FSD Mozambique (FSDMoç):