DEMAND for housing and housing loans remains extremely high but is constrained by inadequate supply of affordable housing and high interest rates.
According to Tanzania Mortgage Market
update by Bank of Tanzania (BoT), the current housing deficit in
Tanzania is estimated at three million housing units with a 200,000 unit
annual demand.
It has been established that most
lenders offer loans for home purchase and equity release while a few
offer loans for self-construction which for the most part continue to be
expensive beyond the reach of the average Tanzanian.
High interest rates offered by mortgage
lenders also pose as another impediment to the growth the mortgage
market. It states that during the third quarter of 2016 , interest rates
offered by mortgage lenders were reported to range between 16 -19
percent.
The 182 days T Bill rate remained on a
high side at 15. 49 percent towards the end of September,2016 from 14.68
percent recorded by mid-May 2016. The rising trend on the 182 days
TBill rate negatively affects all forms of long term debt, including
mortgages.
The government has however expressed its
commitment to ensure the loan interest rates are reduced in order to
enable many Tanzanians to acquire loans. However, the government through
the National Housing Corporation (NHC) has been doing everything in its
power to carry out various projects, purposely to resolve the problem.
NHC has continued to carry out various
projects focusing on high, medium and low income earners. These efforts
have so far recorded positive impact in the mortgage market. According
to the BoT mortgage market update report, has recently completed one of
its major projects in Dar es Salaam.
The NHC’s major recently completed
projects in Dar es Salaam include Victoria Place, which consists of 16
flats. Moreover, NHC has launched a country-wide project known as ‘My
Home My Life’ offering 5,000 affordable housing units countrywide with
prices quoted for the first and second phases of the project ranging
between 43.4m/- to 95.3m/-.
Currently the project has covered number
of districts including Mkinga (Tanga), Mvomero (Morogoro) and Mnyakongo
-Kongwa (Dodoma). Others include Mkuzo (Songea), Mtanda (Lindi), Mrara
(Babati), Unyankumi (Singida), Bomba Mbili (Geita), Ilembo and Iyonga
(Katavi), Uyui (Tabora), Longido and Monduli (Arusha) and Mlole (Kigoma)
as well as Kibada and Mwongozo (Kigamboni, Dar-es-Salaam).
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