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ZIMBABWEAN HOUSING INDUSTRY
Presentation by K Chitando
Managing Director
National Building Society
Zimbabwe – at a glance
Zimbabwe Fact Sheet
Area (sq km)
2015
390,757
Population (proj 000s)
2016
15,967
Population density (per sq km)
2016
41,3
Capital city population (000)
2015
1,501
GDP (USD billion)
2015
13.89
GDP per capita (USD)
2015
819
GDP annual growth rate
2016
1.7 %
Unemployment
2015
80%
Urban population %
2015
32.4
Urban population growth rate
2015
2.3
Inflation rate
2016
-1.33%
3
Background & history
• Zimbabwe is currently challenged by a serious
macroeconomic imbalance, one that has seriously
affected housing finance.
• The imbalance was brought about by a range of
issues such as previous hyperinflation, a deep
recession, a chronic shortage of energy, and a lack
of basic goods and services.
4
Housing Development in Zimbabwe
• The developments of housing in Zimbabwe span two distinct eras,
pre-independence
and post-independence periods. This
background review is based on the experiences of the city of
Harare.
• The history of formal housing development dates to preindependence times.
• In the urban areas there has always been a distinction between
high and low-density residential areas that are attributable to
early separatist policies of the British colonial government. These
policies were explicated through the Land Apportionment Act
No. 30 of 1930 and the Land Tenure Act of 1969.
• Most of the housing provided for Africans was rental
accommodation. It was public housing provided by the
municipalities.
5
Housing Development in Zimbabwe
• Early housing schemes were primarily public rental
housing schemes provided by government and
municipalities for low income families.
• Later, home ownership programmes were introduced
in low-income residential areas, converting houses in
the high density suburbs to owner occupied housing.
• While the home-ownership programmes began as far
back as 1955, in the government-sponsored Highfield
residential scheme, the full conversion to owner
occupied housing was mainly a post independence
phenomenon, especially in the small towns.
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A pre-colonial housing scheme.
• Mbare was established in 1907 and in 1972 its population
was estimated to be under 34,000 of which two thirds
were ‘single’ men accommodated in four large hostels.
• Houses for married persons to rent were six types ranging
from two-roomed flats to six- roomed semi-detached
houses.
• For people of a higher income bracket, home ownership
schemes were started in 1963, with either a freehold or a
99-year leasehold tenure.
7
Post independence 1980-2000
• During the first two decades of independence the new black majority
government faced with a number of challenges, mainly dealing with high
expectations. The government was also pro-liberation nationalist socialist
ideals.
• The lack of a clear policy on housing by the new government necessitated
a review of the colonialists housing policies and strategies. The review
included a study of the types and standards of housing, land tenure
systems and housing finance, resulting in consultations being made with
public and private organisations in housing development.
• Based on this review, in 1982, the government came up with a policy
framework that gave rise to a home ownership policy. These policies were
aimed at redressing the homelessness and promoting homeownership to
formerly marginalised Africans in the urban areas while keeping housing
affordable.
• Employers were discouraged from providing housing in the form of loans
to purchase or build houses. Local authorities were instructed by
government to convert rented accommodation in to homeownership and
houses were sold to sitting tenants.
8
Rapid urbanization & housing supply
• In the early 1980s after independence, some progress was
made in housing provision for low- income families to the
extent where resources were available.
• The pace of urbanization, however, could not respond to the
demand and put pressure on central and local government’s
capacity to provide housing and infrastructure.
• In 2002, according to the National Housing Policy estimates,
over one million residential plots were required, while annual
housing production had fallen to 5,500 serviced plots. The
projected target for housing production was 250,000 units.
• When donors funding ceased the site and services schemes
were discontinued. In several cases, the infrastructure and
services were left incomplete.
At the same time, it was
evident that the waiting list system was not working for the
poorest families.
9
Housing shortage & demand crisis
• The 2000 National Housing Delivery Policy
acknowledged a cumulative backlog of over one
million housing units.
• Due to this shortage, many Zimbabweans were
forced to build makeshift structures, such as
‘backyard extensions.’
• These became the target of the clean-up operation
Restore Order
in
2005 (‘Operation
Murambatsvina’).
• In May 2005, the urban landscape throughout
Zimbabwe’s major cities and urban centres was
abruptly transformed through a government crack
down on illegal structures
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The Aftermath
• After Operation Murambatsvina, the government
embarked upon a reconstruction programme,
named “”Garikai/Hlalani Kuhle” which sought to
promote large-scale delivery of low-cost housing,
vending spaces as well as small and medium
business sites.
• Due to under-resourcing, among other factors,
progress in this regard has been limited. About
3,500 units have been completed, but occupancy
rates are low, mainly due to a lack of basic
services.
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Urbanisation at a glance
1985
1990
1995
2000
Total Population (000s)
8,392
10,241
11,190
12,627
13,805
Urban Population (000s)
2,116
2,797
3,556
4,387
5,370
25.2
28.4
31.8
35.3
38.9
2,031
2,331
2,664
3,088
4.88
4.83
4.70
4.48
Urbanization level (%)
Households (000s)
Household average size
2005
(est’d)
Z$ to 1 USD
1.64
2.64
9.31
55.07
9,896.02
Inflation %
8.49
17.38
22.59
55.86
140
1,995
2,099
1,988
1,986
<1,000
GDP per cap. (const. Z$)
% GDP growth pa. per cap.
3
4
-2
-7
-7
Source: UNHABITAT, Global Report 2003, Financial Gazette, IMF
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Self funded vs Govt supported schemes
SELF FUNDED VS. GOVT SUPPORTED SCHEMES
Operation 'Garikayi'
5%
Govt Matching Pay Scheme
8%
Operation 'Garikayi'
Self Funded Schemes
87%
Govt Matching Pay Scheme
Self Funded Schemes
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Social housing delivery through
(public/private/combination)
• No significant social housing programs on the market since
2005.
• Govt availing state land for low cost housing at
concessionary prices to private land developers but cost of
servicing results in high cost of end product.
• Prescribed Asset Status for approved projects attracts
Pension Funds and Insurance Companies.
• Cost of funds still too high
– 12% -18% local
– 9%-12% off shore
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The role of NBS
• It is against this background that NBS finds itself filling
a gap premised on NBS-Raison D'être:
– To provide access to affordable housing finance to the
general public
– To facilitate and contribute to housing delivery under the
economic blue print (ZimAsset)
– To provide tangible benefits to compulsory national pension
contributors prior to retirement age.
• In so doing, NBS aims to:
– Provide one stop financial services to its Clients (including
loans, deposits, transactional banking)
– Expand financial inclusion in Zimbabwe to the unbanked and
informal sector population.
– Support our shareholder’s service delivery (NSSA)
– Be self sustaining and profitable as a Building Society
Strategic Philosophy
Vision:
“Affordable low-cost housing delivered promptly and profitably in Zimbabwe.”
Mission:
“To make the dream of decent housing a reality.”
Values:
1. Commitment
We are dedicated to delivering quality housing and financial services.
2. Courage
We are bold, inspired and resourceful. We challenge processes and convention to deliver better quality, faster and cheaper.
3. Creativity
We think differently so that we deliver value and service.
Our Customers
Thank You