Dar es Salaam,
"Compared to other countries in the region,
At the end of the year, total lending by banking sector for the purposes of residential housing was Tanzania
"Total number of mortgage loans also grew rapidly, from 1,889 at the beginning of 2013 to 2,784 by end of
It pointed out that factors that led to the increase included a favorable interest rate environment during the year, increased awareness on mortgage loans among borrowers, public awareness campaign by major banks and the launch of mortgage loan products by
The bank, however, observed that high interest rates and lack of affordable housing remain the major constraints on market growth in
Though 19 banking institutions offered mortgage loans, the market was dominated by three top lenders -
"A key element in the growth of the mortgage market," the report explained, "has been the provision of long term funding both in the form of refinancing and pre-financing by the
Mortgage debt advanced by TMRC to mortgage lenders accounted for 11 percent of the market's total outstanding mortgage debt.
Compared to neighbouring countries in the East African region,
As a proportion of Tanzanian GDP, outstanding mortgage debt was equivalent to around 0.36 percent, which the central bank said was lower than that of
On the market's future, the report said the "demand for housing and housing loans remains extremely high but is constrained by inadequate supply of affordable housing and high interest rates."
The bank has warned in the report that the recent rise in the Treasury Bills rate to 15 percent (those with a maturity of 182 days) would have a negative impact on affordability of all forms of long term debt, including mortgages.
Typical interest rates offered by lenders varied between 18 per cent and 21 per cent while the absence of affordable housing was another factor that impeded growth of the mortgage market.
"Most lenders offer loans for home purchase but increasingly different products are emerging such as loans for self-construction and for equity withdrawal, which continue to be expensive and beyond the reach of the average Tanzanian," the report said.
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