Kilimanjaro — THE government has said it will continue to create enabling environment to attract more investment in the housing sector and boost its contribution to economic development.
The Deputy Minister of Lands, Housing and Human Settlements, Mr Ridhiwan Kikwete said recently in Moshi Kilimanjaro that apart from attracting investment to cater for the rising demands for residential and commercial houses, it is of paramount importance in boosting the country's development.
"The government has and continues to create good environments for attracting investment purposes in the housing sector to meet the rising demands for residential and commercial residences," he said.
It is from this backdrop that mortgage loans are increasingly pushed up by the competition, creativity and low interest rates.
According to the latest Tanzania Mortgage Refinance Company (TMRC)'s report, the value of mortgage loans has grown by 7.01 per cent year-on-year.
The value of the outstanding mortgage loans increased to 522.95bn/- at the end of September compared to 509.99bn/- in a similar period last year.
The mortgage report shows that 32 different banks are offering mortgage loans dominated by five top lenders, commanding 64 per cent of the market share.
Also, the fast-growing population, which is estimated to more than double by 2050, is pushing the demand up while the government, in partnership with global non-profit institutions and foreign governments, continues to meet the growing demand for affordable housing.
The TMRC report stated further that, "the competition in the market has led to the emergence of other products impacting mortgage market growth as the products have favourable terms and are used for housing purposes."
According to TMRC, these products are competing with the mortgage in terms of loan amount and, to some extent, tenor as they are offering consumer loans for a period of up to seven years amounting to around 120m/-, enough to buy a housing unit.
"The Tanzania housing sector's fast-growing demand is mainly driven by the strong and sustained economic growth with GDP growth averaging 6 -7 per cent over the past decade," TMRC said.
The Deputy Minister said the increased demands for residential and commercial residences are an opportunity for NHC to identify areas as early as possible so that they can be worked on.
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Mr Kikwete advised the National Housing Corporation (NHC) to continue setting aside areas suitable for attracting investments through the Public-Private Partnership (PPP).
He continued to say that the demand for residential and commercial housing units is growing rapidly and that if this idea of the PPP initiative works, NHC will add other buildings to cater for the sharp rise in demand for houses.
"Apart from increasing the NHC's and the nation's revenues through rent payments, the housing programme through PPP will also help increase job opportunities as that will result from the housing construction projects that will be implemented," he added.
Deputy Minister Kikwete said the government recognised the importance of having residential and commercial houses and that is why it came up with plans to implement some NHC projects through the PPP concept.
On his part, the NHC Kilimanjaro Regional Manager, Mr Juma Kiaramba, said that the institution had more than 700 residential and commercial housing units within the region, which he said were few compared to the existing demands as par available applications.
Regarding the PPP programme for the region, Mr Kiaramba said that NHC had many areas suitable for investment through the PPP which he said included the buildings that were condemned.
"There are many areas which are suitable for investments through the PPP concept but so far we have identified three areas to start with; potential investors have already submitted their applications and the procedures to find those who will enter into joint ventures with the institution being followed so that investment activities can continue and this will be after the approval by the NHC headquarters," he added.
