africa Banking development Economy Government Real Estate Tanzania

Battle for Tanzania’s real estate sector intensifies

Approximate reading time: 2 minutes

The mortgage market in Tanzania registered a growth of 6% in 2017, compared to a growth rate of 16% in 2017, the Tanzania Mortgage Refinance Company Limited (TMRC) indicates in its latest market update of 31 December 2017.

 

Tanzania’s real estate sector is growing fast, with demand mostly driven by strong and sustained economic growth with gross domestic product growth averaging 6-7 percent over the past decade.

Tanzania’s population is also fast growing and is estimated to be 55 million. It is expected to more than double by 2050.

These factors are driving up demand for mortgate in the East African Community member state. These statistics are making several entities including banking sector to look keenly on how to bridge the gap in the market to make home ownerships easy and managable.

According to Stanbic Bank‘s Home Loans Manager Bernard Mfugale, individuals should not have to realize their dreams of home ownership at retirement.

“Stanbic Bank wants to empower these dreams by making them a reality for families; owning a home is a basic need although it remains a challenge for many for several years.”

The mortgage market in Tanzania registered a growth of 6% in 2017, compared to a growth rate of 16% in 2017, the Tanzania Mortgage Refinance Company Limited (TMRC) indicates in its latest market update of 31 December 2017.

“We have simplified the process of buying, building or improving your home by developing solutions that make house hunting, buying and building easier,” Mfugale stressed. Stanbic Bank finances up to 80 percent of the value of the property.

Three new banks have also joined the list of mortgage lenders in Tanzania, increasing the total number of lenders to 31 from 28 in 2016. This is according to a report by Tanzania Invest.

Mortgage debt advanced by top 5 lenders accounts for 59% of the total outstanding mortgage debt. The new entrants in 2017 were Letshego Bank (T) Limited, Yetu Microfinance Bank PLC and Mufindi Community Bank Ltd. Outstanding mortgage debt as at 31 December 2017 stood at TZS 344.84 billion (±USD 151.72 million) compared to TZS 324.08 billion (±USD 142.59 million) as at 31 December 2016.

Stanbic has also joined the battle for the country’s mortgage market and makes sure that all the houses obtained through loans are secured by a comprehensive home insurance from reputable insurance companies but also further ensure that the owners have a life insurance to guarantee that the heirs will still have shelter even after a misfortune such as death or permanent disability.

“As drivers of inclusion, we have now introduced a home construction facility where we finance construction from beginning to end to ensure that those who cannot afford an equity release and already have a picture of their dream house can have it,” said Mfugale.

Source: The Exchange

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.