By Kudzai Jakachira
Zimbabwe’s real estate and construction sectors are facing significant financial challenges due to a shortage of mortgage financing, which is slowing property development and limiting access to home ownership.
Zimbabwe Building Contractors Association president Dr Tinashe Manzungu said the absence of a dedicated mortgage financing institution had forced property developers to rely heavily on direct-payment arrangements, with buyers making monthly instalments over periods of between five and 10 years.
Speaking at the Zimbabwe Real Estate & Construction Summit, Manzungu said the financing model was affecting developers’ cash flow and limiting their capacity to undertake new projects.
Under the current arrangements, developers often wait several years to recover money invested in construction materials, equipment and labour, making it difficult to finance subsequent developments.
The lack of affordable, long-term mortgage facilities has also made it difficult for young professionals and low-income earners to purchase residential properties.
Manzungu said the challenges facing the housing market had wider economic implications, given the construction sector’s links with manufacturing, transport, heavy equipment and employment.
He said improving access to housing finance was critical if the construction and real estate sectors were to realise their potential contribution of between 12 and 15 percent of gross domestic product (GDP).
Manzungu called for the establishment of a specialised mortgage banking institution that would provide financing to property developers while extending long-term credit facilities to prospective homebuyers.
Such an institution, he said, would help improve liquidity in the property market, accelerate housing development and expand access to formal home ownership.
He said addressing the financing gap would require coordinated efforts between Government and the financial sector to develop sustainable housing finance solutions.
