The mortgage market in Tanzania registered a 1.24% growth in the value of mortgage loans as of 30th June 2022 compared to the 1.41% growth recorded in the previous quarter.
This was indicated in the Tanzania Mortgage Market Update – 30 June 2022 recently released by the Bank of Tanzania (BOT) and the Tanzania Mortgage Refinance Company (TMRC).
Tanzania Mortgage Market Growth Q2 2022
The outstanding mortgage debt as of 30th June 2022 increased to TZS 509.99 billion equivalent to USD 220.23 million as compared to TZS 503.74 billion equivalent to USD 218.07 million reported on 31st March 2022.
On a year-to-year comparison, a growth of +7.5% was registered in the value of mortgage loans as of 30th June 2022.
The average mortgage debt size was TZS 82.56 million equivalent to USD 35,654 marking a slight increase from TZS 81.49 million equivalent to USD 35,276 reported in the previous quarter.
The ratio of outstanding mortgage debt to Gross Domestic Product (GDP) decreased to 0.29% compared to 0.30% recorded in the previous quarter.
The Update explains that the Tanzanian housing sector’s fast-growing demand is mainly driven by the strong and sustained economic growth with GDP growth averaging 6 -7% over the past decade, the fast-growing Tanzanian population, which is estimated to more than double by 2050, and efforts by the Government in partnership with global non-profit institutions and foreign governments to meet the growing demand for affordable housing.
Tanzania Mortgage Market Competition
There was no new entrant into the mortgage market during 2022. The number of banks reporting to have mortgage portfolios remained at 33.
The mortgage market was dominated by five top lenders, who commanded 65% of the market.
CRDB Bank was the market leader commanding 38.02% of the mortgage market share, followed by Stanbic Bank (8.11%), Azania Bank (7.13%), NMB Bank (6.82%), and NCBA Bank (4.63%).
The typical interest rates offered by mortgage lenders ranged between 15% and 19%.
Obstacles to Growth of Tanzania Mortgage Market
The demand for housing and housing loans remains extremely high as it is constrained by an inadequate supply of equitable houses and high-interest rates charged on housing loans.
Most lenders offer loans for home purchase and equity release while a few offer loans for self-construction which continue to be expensive and beyond the reach of the average Tanzanians.
Additionally, cumbersome processes around the issuance of titles (especially unit titles) continue to pose a challenge by affecting borrowers’ eligibility to access mortgage loans.