The mortgage market in Tanzania registered a 1.7% growth in the value of mortgage loans as of 31 December 2022 as compared to the 2.54% growth recorded in the previous quarter.
On a year-to-year comparison, a 7.12% growth was registered in the value of mortgage loans as of 31 December 2022.
Total mortgage debt outstanding that resulted from lending by the banking sector for the purposes of residential housing was TZS 531.98 billion equivalent to USD 229.18 million.
This was indicated in the Tanzania Mortgage Market Update – 31 December 2022 recently released by the Bank of Tanzania (BOT) and the Tanzania Mortgage Refinance Company (TMRC).
Tanzania Mortgage Market Growth Q4 2022
The outstanding mortgage debt as of 31 December 2022 increased to TZS 531.98 billion, equivalent to USD 229.18 million as compared to TZS 522.95 billion equivalent to USD 225.46 million reported on 30 September 2022.
The average mortgage debt size was TZS 93.53 million equivalent to USD 40,292 marking a slight increase from TZS 87.27 million equivalent to USD 37,628 reported on previous quarter.
The ratio of outstanding mortgage debt to Gross Domestic Product (GDP) increased to 0.32% compared to 0.30% recorded in the previous quarter.
Tanzania Mortgage Market
There was no new entrant into the mortgage market during the quarter ending December 2022.
The number of banks reporting to have mortgage portfolios declined to 31 banks as of 31 December 2022 compared to 32 banks reported in the previous quarter following Yetu Microfinance Bank Plc put under statutory management by the Bank of Tanzania.
The mortgage debt advanced by the top five Primary Mortgage Lenders (PMLs) accounted for 65% of the total outstanding mortgage debt.
CRDB Bank was a market leader commanding 36.49% of the mortgage market share, followed by Azania Bank (7.44%), NMB Bank (7.38%), Stanbic Bank (7.02%) and KCB Bank (6.34%).
Typical interest rates offered by mortgage lenders ranged between averages of 15-19%.
Outlook of the Tanzanian Mortgage Market
The Tanzanian housing sector’s fast-growing demand is mainly driven by 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.
The Tanzanian housing demand is estimated at 200,000 houses annually and a total housing shortage of 3 million houses.
Efforts to develop housing projects by developers continue with a special focus on Dodoma Capital City as the Government has relocated its administrative functions to Dodoma.
However, high-interest rates and the lack of affordable housing remain the prime constraints on the mortgage market growth.