New Zimbabwe.com

Banks up mortgage lending by 29pc

LOCAL banks increased their mortgage lending by 29 percent to $84 million in 2013 compared to the previous year, but housing demand remains high, figures released on Monday show.
In 2012, banks issued mortgages worth $64.9 million.
Figures provided by the Zimbabwe Association of Housing Finance (ZAHF) show that the number of mortgage applications last year also rose to 1,558 from 1,462 in the prior year against a housing backlog of more than 1,5 million, a third of which is in Harare.
ZAHF is made up of four institutions – the Central African Building Society (Cabs), CBZ Bank, FBC Bank and ZB Building Society.
Cabs recently increased the tenure for mortgages to 20 years while the other institutions have maintained them at 10 years.
The loans are at interest rates ranging between 10 and 20 percent per annum.
Banking sector officials say the country’s high risk profile has resulted in the local financial institutions accessing limited funding from international lenders at high interest rates and short tenure.
“It is our wish to go back to the 25-year mortgages but currently, the environment does not allow that,” said banker Ken Chitando, at a recent property sector seminar.
“Our prices for property are still high. It is an issue that has to do with there being no adequate housing stock,” said Chitando, who is Cabs’ retail banking manager.
Analysts say most ordinary workers do not qualify for mortgages in an economy where government workers are paid salaries of $300 per month.Advertisement