Govt revives housing financing

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Government has revived housing financing, including mortgage guarantee schemes, to make up for its failure to fund national housing development, which slowed down at the beginning of the decade, eventually stagnating two years ago.
President Robert Mugabe yesterday said his administration had disbursed $11 million for housing development this year, $10 million to set up a national housing development facility and an additional $1 million for guarantees.
“It is regrettable owing to unavailability of capital; very little development took place in the house sector over the last decade. However, it is expected that the situation will change for the better following the establishment of a National Housing Development Facility, under which $10 million has already been disbursed towards and provision of housing,” President Mugabe revealed in his speech marking the opening of the third session of the Seventh Parliament.
“In addition US$1 million has been released to the Housing and Guarantee Fund for purposes of guaranteeing mortgage advances for low-cost housing by building societies and finance institutions. This, of course, is far from being adequate, considering the huge housing backlog.”
The backlog, he said, has swelled to over 542 630 since 2000 and would only be cleared if building societies, financial institutions and the corporate sector complemented current government programmes.
The funding could see a steep decline in national housing demand and rescue a sector haemorrhaged by a precipitous mortgages slump, hyperinflation, interest rate spikes and the cash sale condition.
Population explosion in major cities also grew as investment in the housing sector stagnated, resulting in widespread slum development and overcrowding in high-density areas.
To curb the disorders, government and the City of Harare in 2005 reacted by razing down the shanty towns under an infamous operation called Murambatsvina.
Statistics show that Zimbabwe’s urban population has been growing at 17% per annum in the last five years compared to a regional average of 7% a year, as the economic deteriorated rural youths to seek survival strategies in Harare and other towns and cities around the country.
The rapid urbanisation affected low-income residential areas the most, including city flats where apartment sharing became a norm.
Last year, the ministry of national housing and social amenities said areas with the largest housing backlog such as Mbare, Epworth and Chitungwiza have an average occupancy rate of 22 people per every 22 square-metres of residential space.