National housing backlog now at 1,4m

National Building Society (NBS) - (picture: Techzim)

The National Building Society (NBS) is a self-sustaining entity that is delivering projects through partnerships with the private sector and to date has completed 840 housing units, which cost USD$17,1 million. Planned projects will add 9 125 more units.

The building society has been playing a critical role in increasing the country’s housing stock.NBS, which was established in 2016, is owned by State-run pension fund National Social Security Authority (NSSA).

Interestingly, the national housing backlog stands at around 2 million units.

Last year, NBS added 1 790 housing units to the national housing stock, of  which 526 were completed units and 1 264 units were at various stages of construction.

And NSSA chief strategic investments officer Chakanyuka Nziradzemhuka says the State pension fund is not directly involved in providing funding for projects being developed by NBS.

“The models that have been employed are models that if we were to say NSSA go at it alone, it’s very complicated and a dangerous territory to do that. But when you have an institution that is specialised and knows how to roll out these projects, they will be rolled out effectively.

“I’m glad to say of the projects that NBS has completed, NSSA did not fund those projects. What happens in those situations is because of the technical and expert skills that NBS has, they have been able to partner private pension funds to actually be part of that, to support and roll out those particular projects,” he said.

NSSA, like many a pension fund, plays a critical role.

It is considered as  one of the largest source of domestic financing, which is the backbone of any economy.

But the group is also in shaping industry through establishing strategic subsidiaries such as NBS that can attract private sector financing.

“Where you have an initiative, private sector and pension funds are very much willing to support, and one of the enabling characteristics is that partnerships are easier to structure when you focus on the right things,” said Nziradzemhuka.

NBS was set up with the sole mandate of contributing to the national housing stock.

Futher, the building society was set up using investments from the National Pensions Scheme (NPS) Fund and the Workers Compensation Insurance Fund.

According to NBS’s 2018 financials, the company recorded a balance sheet growth of 31 percent from $136,9 million to $177,8 million  owing to increases in deposits and borrowings.

National Housing Backlog

Despite best efforts from the NBS and other players in the housing delivery system, current  headwinds on the market are making it increasingly difficult to clear the housing backlog.

Reports indicate that Zimbabwe needs an estimated 15 to 20 years to clear its national housing backlog, which  has been ballooning in recent years as a result of increased rural to urban migration and high cost of construction.

The national housing backlog is currently estimated at 1,3 million, with Harare alone requiring about half a million housing units.

Real Estate Institute of Zimbabwe (REIZ) president Mike Juru recently said the burgeoning population in urban centres would continue to put pressure on the existing infrastructure.

The demand for housing has of late outstripped supply.

City-to city migration, especially to major cities such as the capital, is also driving the trend, as individuals hunt for employment and other opportunities that go with city populations.

In light of this, Mr Juru said meeting the national demand for housing would not be an overnight exercise but a phase.

Government is currently partnering with various stakeholders , including public sector entities, financial institutions,  private individuals as well as housing cooperatives.

Given that land is a finite resource, Government has since shifted focus to the construction of high-rise accommodation facilities that also make it cheaper in terms of materials needed.