With the target of 220 000 new houses and flats by 2025 likely to be exceeded, building societies have been urged to reintroduce the long-term modest-interest mortgages many need to buy their homes.
Many first time homeseekers have raised concern over the high interest rates charged by banks on mortgage loans and the lack of long-term finance, both making monthly payments expensive.
Speaking during a performance contract signing ceremony by heads of parastatals on Monday in Harare, Minister of Public Service, Labour and Social Welfare Professor Paul Mavima urged building societies to reintroduce long-term mortgages, saying the current limited mortgage finance available was beyond the reach of most homeseekers.
“We want a mortgage system that is going to be affordable to our people,” he said.
“It cannot be affordable if it’s five years; it can only be affordable if it is long-term. We need go back to basics.
“We are talking of a service delivery of a certain level of excellence and we are saying NBS (National Building Society) in the banking sector, you need to be the trailblazer as far as excellence is concerned, so that you can have a demonstration effect to other financial institutions.”
Prof Mavima challenged NBS to lead the way in terms of re-establishing proper mortgage financing in Zimbabwe.
“We hardly have any mortgages; you can’t say you have a mortgage system when you say to people borrow for five years for real estate,” he said.
“It doesn’t make sense, so we need to go back to where you could provide mortgages for 20 years, 30 years so that people who are starting off in life can find decent accommodation which is affordable.
“We are not going to be static. This situation that we have or we had due to a number of factors such as sanctions should not be permanent and we are saying spread out the repayments so that people can pay reasonably well. If you look at our economy, it is on an upward swing so our banks must look at their own system.”
While mortgages are open to everyone, low-income earners could pay almost all their salaries in mortgage payments instead of the 25 to 30 percent that was the maximum when long-term mortgages were available.
The Second Republic has been working tirelessly to ensure that it provides affordable and decent housing for all Zimbabweans under the philosophy of leaving no one and no place behind.
In a bid to accelerate the provision of housing, the Government has adopted several strategies to ensure access to housing by the majority of citizens, including regularisation of informal and dysfunctional settlements around the country. – The Herald
