Issues affecting real estate sector in Tanzania
What you need to know:
- The sector has been building an average of 1,153 new houses annually in the last 12 years
Dar es Salaam. Tanzania’s real estate is growing faster with statistics showing that an average of three million houses are required to meet the country’s population demand estimated at 60 million.
But, recent reports show that the sector has been building an average of 1,153 new houses annually in the last 12 years, something that frustrates the Lands, Housing and Human Settlement Development minister Angelina Mabula.
“The opportunity hasn’t been well tapped among stakeholders. This forum should come with the way-forward as the government plans to provide all required support for the sector’s prosperity,” she told a recent stakeholder’s meeting.
The docket’s director of real estate, Ms Lucy Kabyemera said in mitigating challenges facing real estate in the country, the government is reviewing legal frameworks governing the sector.
“We are now collecting stakeholders’ opinions in order to make the process successful. Review will include the National Housing Corporation (NHC) Act. Cap 295,” she said.
But, property investment analyst Yohana Mtemi urged NHC to demolish and build new buildings as well as renovating others located in different parts of the country in order to meet the ongoing global changes.
“Some houses could be rehabilitated and their uses changed according to demands instead of leaving the ruins to exist as urban ruins,” he said.
A stakeholder from Watumishi Housing Investment (WHI), Ms Sophia Mtaki, challenged the ministry to reduce bureaucracy in provision of housing documents and tittle deeds and improve coordination between the Central and Local Government Authorities (LGAs).
“We are frustrating citizens, because despite paying for the documents, they end up at being told that information available at the ministerial level are absent at LGA level,” she said.
But, assistant title deeds registrar, Ms Joanitha Kazinju said, inconveniences in provision of title deeds and occupancy documents is attributed to the clients failure to submit all the important documents.
“Lack of enough lands registries and experts is another challenge. But, property registration exercise aims to ensure land is planned, surveyed and the ownership is legally recognised,” she said.
But, Ms Pauline Sangale from NMB Bank Plc said the Bank of Tanzania (BoT) Act restricts mortgage loans provision to developers with Debt Service Ratio (DSR) above 40 percent as compared to 66.6 percent of gross loans for normal loans.
“This is unfair because normal loans are insecure as compared to mortgage loans,” she said, advising the Central Bank to provide equal ratio to increase competition.
Another consultant, Mr Saleh Dola said urged the government to review BoT regulations in order to boost financing, noting that both domestic and foreign equally share the concern.
“For instance, Nigeria attracts $4.8 billion (Sh11.04 trillion) in Foreign Direct Investment (FDI) from the diaspora with reports saying if properly managed the amount can reach $60 billion (Sh138 trillion) annually,” he said.
According to him, Tanzania laws and regulations should be favourable to Tanzanians in the diaspora to attract FDI and increase the sector’s financing. But, NHC director general Nehemia Mchechu said the sector’s growth would be determined by the strong Public-Private Partnership (PPP).
“Strengthened PPP will allow vibrant collaboration in Land and Equity Contribution (LEC), Land and Finance Equity Contribution (LFEC), Revenue Sharing Model (RSM) and Long term Lease Agreement (LLA),” he said.
Furthermore, Mr Mchechu said the corporation was aware of available opportunities in the sector, noting that it is currently building 400 apartments in Dar es Salaam that will be followed by the 5,000 apartments in different parts of the country.
“The 400 apartments will be built in 10 blocks with a single apartment expected to have three bed rooms and can be divided in to two independent rooms and a single room. The cost will range between Sh150 million, Sh90 million and Sh46 million,” he said.
He said the Samia Housing Scheme (SHS) will include 55 projects in Dar es Salaam; 22 in Dodoma as well as six others in Mbeya, Arusha and Mwanza.
However, the docket’s Permanent Secretary (PS), Dr Allan Kijazi said the ministry would contemplate all the suggestions from all stakeholders.
He directed Mr Mchechu to organize the stakeholder’s forum, blaming developers for the lack of effective cooperation strategies and the PPP strengthening for the sector’s development.
“Stakeholders have collected all stakeholders’ opinions for effective use of during the improvement of policy, legal and regulations,” he said.
