Central African Building Society (Cabs) has disbursed of $2,8 million for the purchase of stands and building materials to 1 468 people, it has been learnt.
Cabs managing director Kevin Terry said the loans were however far from satisfying the appetite in the market for building.
“The reasons are income levels are low and some properties are overpriced because sellers are using the comparative method instead of valuation method.
“This system tends to overcharge what would realistically be a reasonably priced property,” Terry said in a written response to NewsDay.
He said the building society had since stopped issuing 10-year loans until it secures more funding but it was continuing to issue corporate and personal loans valid for two years.
“We will only resume lending when we have more funds in the business. How much we will have depends on how much we manage to source and how much deposits we manage to mobilise,” said Terry.
He said the business environment had improved compared to the 2009/2010 period thus more loans had been processed.
He said the arrears value percentage on residential loans was 0,06% as at the end of April 2011 meaning that many people were repaying back their loans.
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Cabs parent company Old Mutual Zimbabwe last year approved a $15 million purse for mortgage lending to be committed for low-cost housing schemes in Harare.
The lending is expected to see 1 500 houses being built in Budiriro suburb. The project is yet to start as the building society is working closely with Harare City Council on off-site infrastructure such as water and sewage reticulation.
The property sector has been facing a liquidity crisis since 2009 as people do not have disposable income as many employees are being paid around $200 per month.
