MAKENI Heights Chief Executive Officer, Mumeka Wright says if the housing deficit situation is to be addressed, the mortgage rate must be in the range of 10 to 12 percent (preferably even lower) for the public to have access to affordable finance. Currently, Zambia’s housing deficit is estimated at 1.5 million units and is projected to increase to three million by 2025. While interest rates are high, ranging from 24 percent to 26 percent, she is optimistic that mortgage rates across most financial institutions will go down, with Standard Charted Bank Zambia leading the way by reducing mortgage rates to 16 percent.
Ms Wright said in an interview on Friday that due to the high interest rates the majority of the Zambian population are unable to buy houses or build at a steady pace. “The business of selling houses is difficult because the interest rates are high. The market has the potential to grow but something must be done to address the challenge of high mortgage rate for everyone to have access to affordable housing. This will in turn address the housing deficit.
“Fundamentals of a mortgage rate suggests that it is supposed to be lower than the normal business rate,” she said. Ms Wright said the company had to change its model due to the high interest rates from selling houses to plots because they are more affordable. Makeni Heights is a business that is offering serviced plots in Makeni to help the public have access to affordable and decent housing.
She said with plots people buy, build at their own pace and are offered a flexible payment plan of up to two years. The company has plots which range from K210,000 to about K300,000 and one is required to pay a down-payment of 15 percent while the balance amount can be paid in installments. “We have a flexible payment plan because we understands that we are coming out of challenging economic situation and are just trying to recover. We also have an incentive for those that pay up to 30 percent to start building ,” Ms Wright said.
She said local businesses must also adopt the culture of joint ventures to thrive and build their capacity. Ms Wright said the company has been able to attain its aspirations by embracing joint ventures with some Chinese and Kenyan-based nationals. She said that local businesses should also be open-minded and change their working culture by becoming dependable in delivering goods and services on time.
Ms Wright also said it is important to listen to the public and adopt products that suit their needs to continue with a strong business. She said the company has about 10 people building with 50 percent of them living in the diaspora.Ms Wright said people living outside the country now have interest to build in their home country. Meanwhile, she called on Government to consider incorporating an internship program into the school curriculum so that when pupils are on holiday they are attached to industry.
Ms Wright said this will help keep young people positively engaged during their holidays and cultivate a culture of entrepreneurship in them. She said there was need to reduce the free time youths have by involving them in productive activities while building experience. And on the International Monetary Fund, Ms Wright said the programme is good because it is giving Zambia a reference letter which the country can use.