Watch Louisa Waddingham, Head of Operations – Africa, introduce the ground-breaking mortgage model.
Housing in Mozambique – the stats
- Before Casa Real entered this market, the cheapest formal homes were $55,000 – unaffordable to 99% of the population
- Housing finance told a similar story, with only 600 mortgages, for the wealthy elite, in a country of 30 million people
Reall and Casa Real have constructed houses, including all services and tenure that retail for just $10k
Disrupting the market
Casa Real entered Mozambique to disrupt this market and make climate-smart affordable homes a reality. Since 2019, Casa Real has been partnering with ABSA, the second largest bank in Africa, to unlock and de-risk housing finance for families on low incomes.
Rent to buy – an innovative model for Mozambique
Together, this landmark partnership has developed the Rent to Buy initiative. This works by allowing families to initially rent affordable homes through Casa Real with a plan to eventually buy them. Casa Real reserves this rent for the client, saving it towards a down payment for a mortgage with ABSA, facilitating a deposit that is otherwise impossible for low-income clients to save towards.
Rent to Buy provides an assurance to ABSA that the client is at low risk of default, as they will have built up a successful track record through renting. This has meant that the bank can set an affordable interest rate.
The first affordable mortgage
The first milestone mortgage that ABSA has approved is for Mrs and Mr Alberto to purchase one of Casa Real’s cyclone-resistant $10K homes. This is the first time this has been achieved in Mozambique and sets an exciting precedent for unlocking mortgages for people living on low incomes at scale.
Isaac Suamado, ABSA Mozambique’s Manager said “We are pleased to play our role in driving affordable housing finance and aim to help people own the home of their dreams”.
Patrick Domingos-Tembwa, Reall’s Asia & Africa Partnerships Director said “We are delighted that Casa Real and ABSA Mozambique have closed the first mortgage for a new home owner in the Inhamuiza site. This is a remarkable milestone. It is testament to the continued efforts that have been maintained by both parties over the past 18 months to explore ways of expanding end user finance solutions for the people of Mozambique.
We also recognise and appreciate the unwavering support that the Municipality of Beira has shown to Casa Real on this journey. We look forward to the next phase in these relationships and what we can all learn from them to advance this important mission.”
Casa Real’s cyclone-resistant homes at the Inhamizua site in Beira.
Accelerating the path to net zero with housing that doesn’t cost the earth
Casa Real are demonstrating the viability of innovative models including the $10K home and pioneering green solutions in their Inhamizua site in Beira, with 190 climate-smart affordable homes. With the first affordable mortgage officially unlocked, the potential for real market change – and sustainable transformative impacts – is even more tangible.
- Make an impact by investing in our work
- Find out about Reall’s affordable housing projects on our Data Dashboard
- Sign up for Reall Talk – our digital newsletter