Why building, buying a house in Tanzania costs more now

Dar es Salaam. House building in Tanzania has become more expensive following the rise in cost of construction materials, all due to the impact of Covid-19 that disrupted production and caused freight charges to rise.

The National Bureau of Statistics (NBS) announced on Monday that the annual inflation jumped to a four year high in December, 2021, fueled by rise in price of both food and non-food products.

Tanzania’s inflation rate stood at 4.2 percent in the year ending December 2021, the highest in the last 50 months. This was attributed to an increase in the prices of food and non-food products including clothes by 4.5 percent, building materials by 7.7 percent.

National Housing Corporation (NHC) director general Maulid Banyani said the price of long lead materials, including glass for construction, rose from between Sh75,000 to 95,000 to Sh200,000 per piece.

“The rise in prices is mostly due to changes in the world market and ship freight charges from China and other parts of the world to Tanzania,” Dr Banyani said.

According to him, prices of building materials have also risen locally due to shortage as well as freight charges.

He said to ensure the price doesn’t continue to rise further, they were advising the government to continue monitoring the trends of global prices so that locals don’t take advantage of the situation while ports should hurry up discharging goods to avoid high freight charges that automatically affect prices in the market.

For his part, Watumishi Housing Company (WHC) CEO Fred Msemwa said the prices of building materials including iron sheets, glass, and aluminum have increased thereby affecting the price of finished houses.

“The price of building materials have increased by 10 to 30 percent which has affected the prices of houses that have increased by 8 to 15 percent,” he said.

Dr Msemwa noted that the government initiative to strengthen the industrial sector would help cushion prices locally when global prices increase.

“Importation of building materials supply chain has been affected by Covid-19 but this could be softened if Tanzania’s own industries to manufacture the goods domestically.

For his part, Anwyll FM Consult official Geery Elias said the inflation has affected the price of building materials especially for ongoing projects and those that were starting.

“The budget has had to be changed to reflect the current prices that have mostly risen due to effects of Covid-19 that caused a majority of global companies to stop production thereby affecting the supply chain- the demand is currently higher than the supply,” he stressed.

According to him, many companies had secured loans from banks and were currently struggling to service them because they can no longer produce as earlier planned.