The Central Africa Building Society (CABS) has sold only 700 houses from the 2 800 constructed under the Budiriro Housing project in partnership with the Harare City Council and so is introducing a rent-to-buy scheme to make it easier to raise a deposit. CABS, a subsidiary of Old Mutual, saw the group injecting in excess of $15 million into the project.In an interview, CABS managing director Simon Hammond said the mortgage lender is re-modelling some of the houses and launching a rent-to-buy scheme in order to offset the low uptake.
“The four-roomed houses are more popular than the smaller two rooms, so we are converting some of two rooms to four rooms and they will be available by end of August. In the meantime, we have only sold about 700 houses and we still have a long way to go,” he said.
Mr Hammond said the bank will soon launch a rent to buy scheme for the houses so that people who can’t raise a deposit can move in and raise a deposit over a period. Initially home seekers were expected to pay about $5 000 deposit for two-roomed houses that were being sold at a total cost of $22 000 while the four-roomed houses cost $27 000 with a deposit requirement of more than $7 000.
In February last year, the deposits were reduced to 10 percent from 25 percent of the total house value. This means that home seekers who wish to buy a two-roomed house without a slab that has a total value of $25 302,30 would pay a deposit of $2 530,23, instead of the $6 000 that was being charged before the reduction. Two-roomed houses with a slab are valued at $27 451, while one will have to fork out $31 262 for a four-roomed house.
According to Mr Hammond, the bank is finalising some infrastructure issues to improve the area which include electrification while the City of Harare is completing construction of the roads.
Commenting on the $10 million Youth Fund, Mr Hammond said the bank is still engaging relevant authorities while recoveries from the initial scheme remain slow.
“But we will continue to make efforts.”