via Mortgage loans beyond reach of majority March 25, 2014 by Victoria Mtomba NewsDay
VERY few Zimbabweans will benefit from mortgage loans being availed in the economy because the prices of houses and interests rates are too high, the Estate Agents Council of Zimbabwe (EACZ) has said.
This is aggravated by the current liquidity crunch bedevilling the c economy.
EACZ chairman Oswald Nyakunika said the available mortgages and the rate of interest were beyond the reach of ordinary Zimbabweans.
“The amount available for mortgage funding and the rate of interest is not conducive. As a result, there are very few buyers that will benefit,” he said.
Nyakunika said the number of black land owners had increased compared to the 1980s, but the number of house owners had been decreasing since 2009 when the country adopted the multi-currency system.
Nyakunika said the increase in the number of years of mortgage loans to 20 years would not benefit home buyers as the interest rate does not change.
These are pegged at between 18% and 22%. For stands that cost $10 000, home seekers are expected to pay a deposit of close to $3 000, an amount beyond the reach of many Zimbabweans, who are struggling to make ends meet.
For two-roomed houses in Budiriro that cost $22 000, home seekers are expected to pay a deposit of over $5 000.
“These are problems associated with liquidity and cash crisis. Otherwise it is a buyer’s market and these prices reflect that. Availability of mortgage funding at affordable terms and conditions should help,” Nyakunika said.
A civil servant, who could not be named for professional reasons, said: “I take home $400 after deductions and have six children. I cannot raise the deposit of $5 000, and even if I manage to raise that, I will not be able to make the monthly instalments as they would take three-quarters of my salary. But if one has other sources of income it can be done.”
CABS has said it would spend $100 million in mortgage financing and has doubled its mortgage tenure to 20 years.
The building society is currently constructing houses in Harare’s Budiriro suburb for low-income earners.
Another private property developer, Fidelity Life, is servicing stands in South View Park that would cost $10 000 over 10 years while ZB Bank has stands in Springvale that are selling at between $11 385 and $22 000.
For the 10 months to October last year, banks processed 1 127 mortgage loan applications valued at $65 million.
The mortgaging sector in the country is facing challenges that include lack of long-term mortgage finance and limited housing stock.
The country has a housing backlog of 1,5 million with over 500 000 applicants on Harare’s housing waiting list.