THE mortgage business has increased by 29 per cent in the second quarter of this year compared with the first one, but limited down by high lending interest rates.
The Bank of Tanzania (BoT) said in a
report yesterday that the market went up from 481.63bn/- as total
lending at end of Q2 in June compared to 374.52bn/- in Q1.
“The mortgage market in Tanzania has
continued to grow steadily as the pace of housing investment picks up,”
BoT said. The increase, in year-to-year basis ending this June,
registered annual growth rate of 44 per cent.
This means the sector growth in this year will overtake the previous.
BoT said “factors attributed to this
increase are the increased awareness on mortgage loans among borrowers…
[and] as well as increased competition as new lenders enter the market”.
The report shows the average mortgage
debt size in second quarter was 133m/- compared to 84m/- of the previous
quarter. “The ratio of outstanding mortgage debt to Gross Domestic
Product (GDP) stood at 0.53per cent up from 0.46percent as at quarter
one,” BoT said.
However, out of some 30 plus commercial
banks, the market is controlled by five lenders accounts for 67 per cent
of total mortgage lending. The typical interest rates offered by
mortgage lenders ranged between 16 and 19 per cent.
“High interest rates offered by mortgage
lenders also pose as another impediment to the growth the mortgage
market,” BoT said in the report.
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