Mortgage uptake depressed

Municipal Reporter

Building societies should review mortgages to make them affordable to more people, experts have said.

This follows reports that Cabs is struggling to get takers for its joint venture housing project with the City of Harare. About 985 houses have been constructed in Budiriro suburb with 2 117 more remaining.

Applicants should earn a minimum net salary of US$756 to qualify. They are also required to make a US$7 200 down payment for four-roomed units that range from US$20 000 to US$27 000.

FBC Building Society is also mortgaging cluster houses in Harare and Kwekwe, and eligible applicants should be earning US$2 000 or more per month.

A 25 percent deposit is required for the units, which cost between US$61 750 and US$209 000. Only 2,8 percent of Zimbabweans earn US$756 or more, according to the Zimbabwe National Statistics Agency.

University of Zimbabwe Economics senior lecturer Dr Clever Mumbengegwi said: “If a product is offered and takers are very few, it means pricing is wrong and people cannot afford. It also means it is not good value for money.

“Financial institutions need to review pricing, marketing and the model they are using to sell the product.”

Human resources expert Mr Shepherd Kembo weighed in saying: “Companies are unable to pay huge salaries and also struggling to pay workers on time . . .

“As long as economic performance is depressed, it will be very difficult for mortgages to be taken up.

“Almost all civil servants are over-borrowed. The breadbasket for a family of six is around US$500, leaving workers with very little disposable income.”