CRDB, Stanbic banks dominate as Tanzania’s mortgage market hits 522.9bn/- in Q3, 2022

Tanzania’s mortgage market registered a 2.5 per cent growth in the value of mortgage loans during Q3, 2022 as compared to the 1.24 per cent growth recorded in the previous quarter according to the latest Bank of Tanzania (BoT) Mortgage Market Update.

According to the report, the fast-growing demand housing sector demand in Tanzania is mainly driven by the strong and sustained economic growth with GDP growth averaging 6 -7 percent 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 of affordable housing.

The report shows that the outstanding mortgage debt as of 30 September 2022 increased to 522.9bn/- ($225.46 million) as compared to 509.99bn/- ($ 220.23 million) reported on 30 June 2022.

The mortgage market was dominated by five top lenders, who commanded 64 percent of the market with CRDB Bank Plc emerging as the market leader dominating the market by 37 per cent followed by Stanbic Bank that dominated the market by 8.1 percent,

Azania Bank scored in the third position dominating the market by 7.3 per cent while NMB and Exim Bank stood in the fourth and fifth position dominating the market by 7.2 and 4.5 per cent respectively.

On a year-to-year comparison, 7.01% growth was registered in value of mortgage loans as of 30 September 2022.

The average mortgage debt size as at 87.27m/- ($37,628) marking a slight increase from 82.56m/- ($35,654) reported on previous quarter.

The ratio of outstanding mortgage debt to Gross Domestic Product (GDP) increased to 0.30 per cent compared to 0.29 per cent recorded in the previous quarter according to the report.

“The sustained strong growth in private sector credit is explained by recovery of private sector activities from the effects of COVID-19, improved business environment in the country, and supportive fiscal and monetary policy conditions,” the report said.

It added that Tanzanian housing demand (which is estimated at 200,000 houses annually and a total housing shortage of 3 million houses as per the NHC report) has been boosted by easy access to mortgages, with the number of mortgage lenders in the market increasing from 3 in 2009 to 32 by 30 September 2022 and the average mortgage interest rate falling from 22 percent to 15 per cent.

“High-interest rates and lack of affordable housing remain the prime constraints on mortgage market growth,” the report said.