ZIMBABWE’S largest mortgage lender, Central African Building Society (Cabs), advanced a total of $940 million during the financial year to June 2006
, a 252% increase on the $267 million disbursed during the same period last year.
The building society said of the funds lent, $422 million was advanced on the security of residential properties.
Funds amounting to $518 million were made available for commercial and industrial properties.
“The mortgage book grew to $1,3 billion as at June 30. Nevertheless, the year was challenging one in that mortgage lending was not very active given the economic fundamentals which affected the property market,” the society’s board of directors said in a statement accompanying financial results.
Cabs said the increase in property prices, interest rates and building costs remained an obstacle to both property purchases and developments.
“In light of this, the society’s mortgage book performance was inconsistent with the previous period. In spite of the challenging times for many of our borrowers, the society does not have a single property in possession of its books,” Cabs said.
During the period under review the building society spent $133 million on housing developments.
Cabs managing director Kevin Terry told businessdigest that the building society would continue supporting housing development as interest rates were still beyond the reach of many potential home owners.
Prices of land and houses have risen by over 500% since the beginning of the year.
“The building society made available $133 million to fund infrastructural development and servicing of stands in Bulawayo, Kwekwe and Gweru,” Terry said.
He said of the $133 million, $90 million was used to service 273 stands in Bulawayo.
“We are committed to finding ways to develop affordable housing projects countrywide. The major difficulty we are facing is the unavailability of serviced stands with title deeds,” he said.
Cabs said it was negotiating with property developers to finance housing development projects country wide to reduce the housing backlog.
“Our aim is to increase mortgage finance, but at the moment we are not earning any money because interest rates are low. Until we understand where rates and inflation is going, we can not say how much we intend to spend on housing this (financial) year,” Terry said.
The building society said after taking into account all operating expenses, interest to depositors and making allowances for provisions, the society recorded a net profit of $4,2 billion for the period before appropriations.