Banking sector to fund $366m housing projects

THE banking sector is projected to build 11 611 housing units valued at $365, 63 million by year end from 5 700 housing units valued at $172, 08 million built in 2017, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya has said.

This comes at a time when Government is pushing to build 300 000 housing units in the five year period.

RBZ said it is within the Government’s mandate to provide an enabling environment for the building of low cost housing for the majority of the people to have shelter.

In his Monetary Policy Statement last week, Dr Mangudya said the provision of housing is a critical pillar in the infrastructure eco-system of an economy.

“As at December 31 2017, the banking sector funded a total of 5 700 new housing units valued at $172, 08 million and is projected increase to 11 611 units valued at $365, 63 million as at 31 December 2018.

“It is encouraging to note that the highest number of housing units continues to be targeted at low income households in the high density areas.

“Significant imbalances, however, exist in the housing market, wherein demand outstrips supply and to this end, the banking sector plays a central role in bridging this gap,” said Dr Mangudya.

RBZ has opened up the building society segment to allow other banking institutions such as commercial banks, to offer mortgages to deepen the sector, in this regard.

It is against this background that banking institutions are urged to come up with innovative affordable mortgage funding models in order to meet the ever increasing housing demand.

This call also comes at a time when local firms are increasingly tapping the burgeoning property sector in order to unlock value and hedge their investments as stocks and fixed-term investments on the money market continue to lose their appeal.

In a volatile market where inflation is starting to affect some economic sectors, a combination of pent-up demand from local home seekers and freed-up land for investments – particularly in peri-urban areas – has created a lucrative investment avenue for investors.

Most local companies are beginning to leverage on their long-term assets to invest in the property sector.

Some none banks and financial companies like Fidelity and National Social Security Authority have also joined the property investment business.