Cheaper houses to rescue public servants

DAILY NEWS Reporter

WATUMISHI Housing Company (WHC) is finalising the establishment of Nyumba Fund, a collective investment scheme to promote individual savings and house purchases.

“We are determined to construct affordable houses for low earning Tanzanians and have in place a solid mechanism to enable individuals to raise funds and buy houses,” WHC Chief Executive Officer (CEO), Fred Msemwa said in Dar es Salaam yesterday.

He said the fund, which is scheduled for official launch by next January, will encourage individuals, especially new entrants into the labour market, to invest gradually, albeit small amount over time for house purchases.

Said Dr Msemwa: “And, we want the fund to operate as flexibly as possible…investors will have the discretion on the best way to use their money.” The Nyumba Fund will be investing the raised money to generate profits that will be credited to the investors, said Dr Msemwa, “So, the investors’ principal investments will be growing through earned profits.”

WHC, which the government established in 2013 to build 50,000 houses under the public servant housing scheme for sale to public servants, has so far invested about 42bn/- in the construction of 943 housing units.

The company has as well constructed 186 teachers’ houses in remote areas as part of the government initiatives to improve the working environment for teachers in rural areas.

“We are particularly proud of the teachers’ housing project that we have successfully implemented in 19 regions,” said Dr Msemwa, recalling the hitches experienced during the project execution, “We had to use donkeys to get construction materials to some project sites.”

He said with four years in operations, WHC has already accumulated appropriate experience in the market and is well positioned to ensure sufficient house supply in the market, “We now know the market better that when we started.”

Dr Msemwa however decried excessive mortgage interest rate, which he said was impeding many potential buyers from purchasing the houses, “Truly, the excessive interest rates are scaring prospective house buyers.”

Through WHC, prospects are high that successful execution of the housing project will have huge social and economic impacts as well as accelerate development in the country’s peripherals. The project will also play a significant role in checking squatters in the country.

“This is historic and the largest ever real estate project to be implemented in East and Central Africa if not the entire African continent,” Dr Msemwa said of the multi-billion project that seeks to ease the housing problem among public servants in the country.

According to available data, the country faces an acute shortage of houses, with the demand-supply gap estimated at 1,200,000 units and growing at an annual rate of 200,000 units. Although the problem affects all people in urban areas, the public servants who are compelled to work in rural areas are the hardest hit.

The National Housing Corporation (NHC), pension funds and other private developers have been building houses, which however remain beyond the reach of many people due to their high prices.

But, according to Dr Msemwa, through WHC, public servants can buy the houses at between 10 and 30 per cent cheaper than the market prices through mortgages repayable in up to 25 years.