Enacy Mapakame Business Reporter
National Building Society (NBS) says it has introduced a diaspora mortgage plan to enable Zimbabweans living abroad to invest in real estate back home.
Under this package, the institution will allow Zimbabweans living outside the country to buy residential stands at zero deposit with an interest rate of 8 percent and one can start building within 10 years of repayments.
Ordinarily, mortgage lenders provide funding for completed houses as opposed to stands. Speaking at a virtual Property Market Zimbabwe 2020 co-hosted by Financial Markets Indaba and West Property Zimbabwe, NBS head of mortgages Amos Kumwenda, said this package was designed to enhance affordability of real estate products by Zimbabweans abroad looking at investing back home.
Currently, the financial services firm has two products for the diaspora market under this package, one in Harare and another in Bulawayo.
“We have realised there are many Zimbabweans in the UK, South Africa and other parts of the world who cannot afford a mortgage for a complete house yet they want to invest in property back home. So this package will allow them to develop their own houses at their pace and it is more affordable that way,” he said.
The Harare residential stands in Glaudina high density area range from 200 square meters to 240 square meters, while the Bulawayo one is a medium density development.
Mr Kumwenda added the property market remained a viable investment for both the domestic and diaspora market and as such NBS would continue rolling out more projects across the country.
Various other institutions are tapping into the diaspora market, which provides stability as the products are priced in USD terms as opposed to the volatile local currency.
West Property Zimbabwe executive chairman Ken Sharpe said currency instability had remained one of the major challenge for the real estate sector even prior Covid-19 crisis.
This, he said, was not prevalent to the real estate alone but across sectors.
“The problem is we adopted a local currency and now in hyperinflation. All other sectors have problems pricing products in a currency that cannot hold value,” he said adding that the relaxation of laws on free funds was a ray of hope that could stimulate demand.
Speaking at the same platform Seeff Zimbabwe managing director Patience Munetsi Patongamwoyo said under the current challenging economic environment characterised by inflationary pressures and waning disposable incomes, building was a cheaper option for many Zimbabweans as opposed to purchasing a fully completed structure. This also comes as mortgage lenders are now more skewed towards the diaspora market which has a more stable currency.