Zimbabwe: $5bn Allocated to Housing for Low Income Earners

Senior Reporter

Government has restructured the national housing development strategy to prioritise affordable housing for low income earners with the $5 billion released by Treasury set to be channelled towards the initiative.

National Housing and Social Amenities Minister Daniel Garwe said the move to focus on social housing was on the back of increased support from the private sector in housing development.

"We are receiving a lot of support from the private sector so we have now restructured our strategy in terms of housing that is financed through Treasury.

"The treasury mandate will now focus primarily on civil servants and those citizens that are on the lower echelons of our economic structure.

"The private sector initiative will be to the open market for anyone who can afford it. Already, we have received $5 billion for social housing and our target is civil servants and people who cannot afford upmarket housing," he said.

To cater for the youths who have no capacity to buy properties, the Minister said Government was reintroducing the rental markets that would allow people to rent State properties at affordable prices while saving up to buy them.

He said the move to develop housing for the people would not only be targeted for urban populations but would also consider those in rural communities.

"We also have great interest in developing our rural communities so we are targeting to build houses and social amenities in all our Rural District Councils. We are working on a programme to develop smart cities going forward and this has already gained interest from the private sector, insurance companies and pension funds and the banking community.

"Although I cannot mention names yet, as we speak we already have a certain corporate that has written to the Ministry and taken up houses in excess of 4 000 that we will build for their employees," said Minister Garwe.

Government had invited more private sector players to join the housing development initiative on a finance, design and build basis and his Ministry was discussing with Treasury for tax holidays and other incentives for such investors.

Finance and Economic Development Minister Professor Mthuli Ncube said Treasury would consider awarding prescribed asset status or national project status to private sector investors in the real estate sector.

"All those are things we are considering but we will look at this on a case by case basis. Over time it is our hope that we can increase the capital markets involvement in housing finance through the issuance of real estate investment trust instruments. Those tradable instruments are meant to increase liquidity through the capital markets into the housing sector," he said.

"We are aware that the private sector has expressed interest in putting together this structure and this is the first time we are doing something like this. As Minister of Finance I have announced various tax incentives to allow for these instruments to be easily traded.

The intention is to increase the quantum of resources in the real estate sector."

Prof Ncube said the real estate sector would not be excluded from the general infrastructure development agenda.

He said Government also intended to issue infrastructure bonds for additional capital into the housing sector.

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