Consumers Association of Malawi (Cama) executive director John Kapito has backed the decision by Malawi Housing Corporation (MHC) to raise house rentals effective July 1 this year.
The raise will come at a time the corporation has made losses in two consecutive years on its rental accounts.
Last year, MHC posted a K43 million (US$95 556) loss compared to K38 million (US$84 444) in 2013.
Kapito, in an interview on Wednesday, said MHC was justified to raise house rentals because houses belonging to private tenants are priced highly and nobody complains.
“When you look at the market, MHC houses are still cheap and yet everybody complains when they are raised. Private landlords must also be chided when they raise rentals because many people live in private-owned houses paying high rentals,” he said.
Minister of Lands, Housing and Urban Development Paul Chibingu told Business News on Monday that he gave MHC the go-ahead to raise house rentals effective July 1 as one way of increasing revenue to help the parastatal meet some of its obligations.
He said delays to increase rentals would compromise the operations of MHC.
Said Chibingu; “I have just signed a memo which was on my desk authorising the increase of [house] rentals. Every time house rentals are increased, people complain, but I am saying that those who cannot afford to pay the new rates must move out of the houses so that others can occupy them.”
Chibingu could, however, not disclose the extent of the raise per each unit.
Commenting on illegal tenants who occupy MHC houses, Chibingu said he has knowledge that some people are renting out houses at a much higher rate and warned that the long arm of the law will catch up with them.
“I have a case in which a Malawi Defence Force soldier discovered that one of his neighbours is an illegal tenant and having approached officials at MHC since he was on the waiting list, he was told to identify the house illegally occupied.
MCH general manager Wezi Mkandawire on Wednesday confirmed that house rentals will be raised, but could not indicate by how much.
“We are raising rates for our houses, but I cannot competently comment as to how much each unit will be costing. We are in the process of coming up with a statement on that one and the nation will be told as to how much the rates will rise,” she said.
Mkandawire said the parastatal is in the process of applying for a loan, which will enable it to construct 648 houses in Lilongwe and 400 in Blantyre.
Apart from that, she said they will also build one United Nations (UN) house near Sunbird Capital in Lilongwe, which will enable the parastatal to raise more money.
According to officials at MHC, a house with one bedroom on the open market costs K20 000 (US$44) while that belonging to MHC is pegged at K7 000 (US$16).