12 December 2012

Zimbabwe: U.S.$ 1billion Contributed Towards Housing

MULTILATERAL financial institutions contributed around US$1 billion toward housing development in Zimbabwe between 1980 and 2007, ZB Bank mortgages division managing director, Allan Ratsauka said.

In a presentation at the Zimbabwe Real Estate Investment Summit held last week, Ratsauka said housing finance in Zimbabwe had dried up after multilateral financial institutions stopped funding housing development schemes in the country.

The IMF and World Bank stopped funding projects in Zimbabwe over non-payment of debts. African Development Bank however still supports projects in Zimbabwe.

The summit's objective was to promote real estate finance and development in the country.

"Between 1980 and 2007, the International Monetary Fund (IMF) contributed US$552 million, the World Bank US$1,3 million and the African Development Bank (ADB) US$524,7 million. Funding has not been easy since these institutions stopped funding," he said.

He said housing finance was not available as the local authorities were cash strapped and had eased their role of servicing land.

"Available land is being sold at exorbitant price to meet other requirements (US$3,00 per square metre) and local land was in the hands of speculators. It seems genuine developers are being forced out," he said.

He said the problem had been made worse by financial institutions that were not lending long-term mortgages. The interest rates were also said to be high.

Ratsauka said annual housing production was between 15 000-20 000 units per annum when housing development funds were available.

Chairperson of the Portfolio Committee on Public Works and National Housing, Lovemore Mupukuta, told Parliament this year that the urban housing shortage topped one million, a figure that is expected to rise by at least five percent every year.

The absence of both private and public sector finance to service land for housing development has been cited as the major reason for the country's huge housing backlog.

Speaking at the launch of a housing initiative between the Zimbabwe Allied Banking Group and the Zimbabwe Amalgamated Housing Association (ZAHA) recently, the bank's Business Development manager, Florence Gowora said the current huge housing demand calls for collective action by all concerned stakeholders and in particular the financial services sector.

She said the bank would ensure that the low income segment of the population has access to decent housing and urged other financial institutions to come up with affordable housing mortgages as a way of reducing the huge housing backlog.

The increase in rural to urban migration has also been cited as another factor contributing to the current housing backlog.

In the 2012 Mid-Term Budget, the Ministry of Finance allocated only US$6.4 million towards housing development projects aimed at easing the housing backlog.

Property Paradise Real Estate chief executive officer, Phinias Tafa, said the Zimbabwe Real Estate Investment Summit was more than an exciting high level and big decision making forum.

"This annual event will become the county's premier real estate investment and development discussion forum, offering unprecedented learning and networking experience, all intended to transform the property industry," he said.

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