HomeBusiness DigestHousing backlog continues to rise

Housing backlog continues to rise

Ngoni Chanakira

THE opposition Movement for Democratic Change (MDC) says the construction sector has the potential to provide a substantial number of jobs that can be sustained if investment and economic gro

wth are restored.

The party says Zimbabwe has an urban housing backlog of more than 500 000 with another 250 000 units needed on farms and mines.

In its Restart economic blueprint programme, the MDC says lack of adequate shelter is one of the most pressing social issues in Zimbabwe.

The Association of Building Societies of Zimbabwe, in its latest report, said the cost of constructing a new house in the high density areas escalates almost daily and building costs are now in the region of $7,5 million for a 26 square metre house.

The association, then led by business tycoon and former Intermarket Holdings Ltd chief executive officer Nicholas Vingirai, said funds from the United States Agency for International Development (USAid) and other sources for the low income private sector housing programme had run into difficulties and although the medium income ceiling for low income earners was increased at the beginning of last year to $28 900 this figure had been overtaken by events and there was need for a significant upward revision.

Mortgage interest rates for the medium and lower density housing have been increased but inflation-driven growth in the value of properties has far outstripped the average income earner’s ability to obtain loans of any meaningful amount in order to purchase a property.

Vingirai, in his last report, said many households had “rented out” portions of their houses in order to overcome the increasing cost of living and part of this income had been used to supplement increased mortgage repayments and, as a result, the “arrears” position for building societies had continued to improve.

Some companies, in their bid to help employees, have taken up housing schemes whereby money is deducted from their salaries for the purchase of a house. Others, such as Interfresh Holdings Ltd have built low income houses for employees.

“A large proportion of families are separated by migrancy, making reuniting families in decent accommodation one of the key challenges in the MDC’s social agenda,” the party said in its document launched on January 29. “The housing programme also seeks to further MDC’s economic objectives: by dramatically increasing the rate of house-building, a large number of jobs will be created, incomes will expand and there will be multiplier effects in the economy through linkages back into the building material supply industries.”

The opposition party said it sought to substantially reduce the urban housing backlog within five years and to provide good basic family housing on farms and mines.

“Tenure issues will be clarified as part of the mandate of the Land Commission, allowing farmland to be legally sub-divided to provide farm worker housing, together with water and sanitation, according to set standards,” the MDC said.

President Robert Muga-be has, on several occasions, promised the nation that there would be housing for all soon which promises have however failed to materialise.

Housing cooperatives have sometimes been hastily set for this purpose.

However most have collapsed after being invaded by unscrupulous business executives bent on making a fast profit by conning scheme participants.

Such cases have been witnessed in Harare’s Hatcliff and Waterfalls medium density suburbs.

In these areas disgruntled participants have had to seek Court action to recover money after the schemes failed to materialise and cooperative leaders fled with their hard-earned deposits.

While business tycoons are busy constructing billion-dollar mansions on hilltops countrywide, the majority of the country’s citizens cannot afford basic accommodation.

Analysts say however the construction industry is very expensive and the MDC will need lots of resources to fulfill the promise of 750 000 units.

The party says its commitment will involve a number of complementary financing strategies with public and private sectors, as well as homeowners themselves.

The MDC says there would be allocations of public investment funds through the national budget and support to local councils to expand housing provision and provide the stands for site-and-service housing schemes.

It says there would be on site-and-service and cooperative schemes, whereby home owners and cooperative members could undertake the subsequent building themselves or do their own contracting as and when they have the means to do so.

The party says legal and taxation changes would be made to provide an effective secondary mortgage market.

“The construction se-ctor has the potential to provide a substantial number of jobs which can be sustained as investment and economic growth are restored,” the party says in its document.

In a new twist to the housing saga Reserve Bank of Zimbabwe governor Gideon Gono recently announced a 30% facility meant to benefit the construction sector.

In terms of the monetary policy statement announced on December 18, the RBZ governor advised that concessionary finance at a maximum all-inclusive interest rate of 30% would apply to all productive and export sectors.

Under this facility, statutory reserves contributed by financial institutions were made available to commercial and merchant banks for onlending on a revolving basis.

The governor said construction companies and building contractors who are registered members of the Construction Industry Federation of Zimbabwe would benefit from the scheme.

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