TANZANIANS wishing to own houses through mortgage financing should do so with caution by ensuring that they acquire loans that match their incomes, the Minister for Land, Housing and Human Settlements Development, Prof Anna Tibaijuka, has warned.
Prof Tibaijuka issued the warning in Dar es Salaam shortly before laying a foundation stone for the Ilala Mchikichini housing project being implemented by the National Housing Corporation (NHC). The over 4bn/- project consists of 48 housing units which will be sold at 169m/- each upon completion in February, next year.
Each of the units comprises of three-bedroom self contained house on 115 square metres of land. While urging Tanzanians to acquire houses through mortgage financing, she noted that defaulters would have their houses auctioned by the banks which issued the loans.
"I urge Tanzanians; especially the youth to acquire houses through mortgage financing. Even in the developed world people do not use cash to build house. "The good news about the arrangement is that it allows repayment to be made during a long period of time of between 30 and 40 years.
"However, we should be very careful to ensure that we are able to repay the money otherwise banks would auction the houses to recover the debts," Prof Tibaijuka, a former Director General of Nairobi-based UN Habitat, warned. The minister said that her office had received complaints from some of the people who have acquired houses through mortgage financing.
She also hinted that her ministry is currently having talks with the Bank of Tanzania (BoT) on how interest rates, which she admitted are a hindrance to most potential house buyers, could be reduced. Prof Tibaijuka said that the government is also considering to lower taxes on building and construction materials in order to reduce the cost for constructing houses.
Speaking earlier, the Director General of NHC, Mr Nehemiah Kyando Mchechu, said the corporation has tabled a number of proposals to the government which could lead to reduced prices of its houses. "We proposed to the government to shelve taxes on building materials and VAT (value added tax) on NHC houses.
"However, if the government finds it hard on shelving the VAT for all of our houses then it should consider dropping VAT on houses sold for between 20m/- and 100m/-," Mr Mchechu said. As part of its five-year strategic plan to put 15,000 housing units in the market by the year 2015, the NHC boss said the corporation is presently undertaking projects in 14 regions countrywide.
"There is also a project for low cost housing in Dar es Salaam to be sold at between 30m/- to 45m/- that we expect to launch in one week or so," he noted. At the same occasion yesterday, the Chairman of the Parliamentary Committee on Lands, Natural Resources and Environment, Mr James Lembeli (Kahama - CCM), urged NHC to give priority to ordinary citizens.
"The pace on construction of NHC houses should also consider the plight of low income earners to enable them own decent and affordable houses," Mr Lembeli urged. The NHC Board Chairman, Eng Kesogukeweke Msita, hailed both the central and local governments for cooperating with the housing corporation in implementation of its projects.