The Effect of Mortgage Financing Conditionalities on the Development of Residential Housing in Tanzania

Abstract: The objective of the study was to analyze the effect of mortgage financing on the development of residential housing in Tanzania. The study employed different estimation techniques in analyzing the empirical relationship between housing financing and development of residential souses in Tanzania. Data was analyzed using the unit root test, descriptive statistics and Ordinary Least Square (OLS) for estimating the variables while the Augmented Dickey-Fuller (ADF) test was used to ascertain stationarity of the variables. The findings show that there is a strong relationship between mortgage financing and development of residential houses in Tanzania and that the development of affordable housing stock in Tanzania is highly influenced by mortgage loans offered and interest rates charged over the loans. It was also found that Tanzania still suffers from a shortage of good quality and affordable housing. The current housing deficit is estimated at three million housing units valued at US180 billion coupled with a 200, 000 units annual demand with a projected combined cost of US12 billion although the number of housing stock have been increasing over the years. It is recommended that in order to increase residential housing in Tanzania there should be an increase in the amount of funds allocated to finance residential housing developments with low borrowing interest rates. The higher the costs the lower the demand for mortgage finances by the community hence poor residential housing. Keywords: mortgage finance, housing, interest rate, commercial banks. Title: The Effect of Mortgage Financing Conditionalities on the Development of Residential Housing in Tanzania Author: Mutahyoba D. Baisi International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 13, Issue 2, October 2025 - March 2026 Page No: 612-625 Research Publish Journals Website: www. researchpublish. com Published Date: 04-March-2026 DOI: https: //doi. org/10. 5281/zenodo. 18864478 Paper Download Link (Source) https: //www. researchpublish. com/papers/the-effect-of-mortgage-financing-conditionalities-on-the-development-of-residential-housing-in-tanzania