Zimbabwe’s mortgage financing and credit markets remain constrained with more than 80 percent of property transactions being conducted in cash during the first quarter of 2026, according to First Mutual Wealth (FMW).
In its latest quarterly review, FMW observed that access to mortgage finance remains narrow, largely confined to formally employed individuals and members of the diaspora. This limited reach reflects broader macroeconomic challenges, including subdued savings rates and heightened lender caution in an inflation-prone environment.
“It is estimated that over 80 percent of property transactions in the first quarter of 2026 were cash-based, reflecting limited mortgage availability,” the firm noted.
Zimbabwe’s mortgage market continues to be shaped by a preference for US dollar-denominated loans, as financial institutions seek to mitigate currency risk.
As a result, borrowing conditions remain stringent.
Leading lenders such as CBZ Holdings, National Building Society (Zimbabwe), Stanbic Bank Zimbabwe and Nedbank Zimbabwe typically require deposits ranging from 10 to 30 percent, while charging interest rates between 14 and 22 percent over repayment periods of five to 20 years.
Industry analysts attribute the shallow mortgage market to limited long-term capital formation within the economy. Weak domestic savings and the absence of deep institutional funding pools have constrained the ability of lenders to extend long-tenor housing finance at scale.
Despite these financing limitations, the residential property sector has demonstrated notable resilience. FMW estimates growth of between 0.5 percent and one percent in the first quarter, supported by enduring structural drivers such as population growth, urbanisation and a chronic housing deficit.
The rental segment, in particular, has emerged as a stabilising force.
“The rental market emerged as the sector’s strongest pillar, providing consistent income streams and reinforcing real estate’s appeal as a defensive asset class,” the report stated.
Gross yields of between eight and 10 percent, coupled with stable US dollar-denominated leases, have sustained investor interest, positioning property as both a store of value and an income hedge.
Rental levels reflect this relative strength. Monthly rates for medium-density housing averaged between US$400 and US$800, while prime or serviced properties commanded at least US$1 000.
By contrast, the commercial property segment presents a more fragmented picture. Traditional central business district office spaces continue to face elevated vacancy rates, as businesses respond to cost pressures, infrastructure constraints and evolving workplace preferences.
FMW noted a gradual shift towards decentralised business hubs and mixed-use developments, suggesting a reconfiguration of urban demand rather than an outright contraction in the sector.
This divergence, the report added, highlights the increasing importance of asset selection, with performance now closely tied to location, adaptability and tenant relevance in a changing economic landscape. – TML