Zim property market poised for growth

Many would argue that with everything going wrong in Zimbabwe, property is the last thing one would think of investing in.

But estate agents operating in that country are confident that the property market is set to be buoyant as investor appetite and confidence is renewed.

According to the Knight Frank Africa Report 2011, the majority of house purchases are self-funded resulting in buyers being able to dictate terms. This is because there is little credit available and a limited number of financial institutions offering mortgage finance.

Furthermore, the report indicated that although the global economic slowdown affected the levels of international investment in Africa, overseas investors continue to see opportunities for property development in Africa.

The property market in the past year has had its fair share of ups and downs characterised  by a downturn thanks to the Reserve Bank of Zimbabwe (RBZ) Directive in April, said Juliet Harris, managing director of  Pam Golding Properties (PGP) in Zimbabwe.

Harris explained that the directive issued a stipulation that the proceeds from sale of property could no longer be remitted to sellers’ offshore account without the RBZ approval.

Funds could no longer be remitted from our Trust Account without RBZ approval. However, she said PGP sales have not been affected by this stipulation where funds were paid locally.

“PGP Zimbabwe has been lucky to have concluded such deals thus increasing sales figures but many agencies have been seriously affected by this stipulation,” said Harris.

PGP Zimbabwe operates from its head office in Harare and sells properties in Harare and areas including Mutare, Nyanga (Eastern Highlands), Kariba in the north and other areas.

Asked about the general property market conditions currently, she said there is talk of prices increasing. Harris is of the opinion that if a property is priced right, it will sell within a month and will sit on books for months on end if the pricing is not right.

“Mortgage bonds for a short time became available for the first time in 10 years, but have waned now that there is a liquidity crisis in Zimbabwe.”

Locals are said to be the majority of buyers, some who are either upgrading to bigger properties or downsizing to meet their financial commitments.

Chinese buyers have cooled off with an increase in Singapore nationals entering the property market. Buyers are crazy about Harare, the largest and capital city of Zimbabwe.

Demand is huge in the wealthy suburbs such as Borrowdale, Chisipite and Newlands areas which command high prices, have better schools, a quality water supply and aesthetic residential appeal.

“Typically, properties in demand are priced between US$120 000 and US$150 000, with features such as a borehole (an essential element in light of water shortages) and run-down houses allowing the buyer to renovate and sell for a profit,” said Harris.

Properties in the US$150k to US$250k are also in demand as many people are in a position to afford without bond financing.

Harris said an entry level for a one bedroom flat costs between US$20k to US$30k, a two bedroom between US$35k and US$45k. A four bedroom home in a good area, located on an acre or two of land is priced between US$250k and US$650k and executive homes are priced between US$700k and US$1.5m.

As with many property markets globally, Zimbabwe is faced with a liquidity crisis with many people battling to get mortgage finance.

“Property buyers are actively looking to buy in up-market gated communities as long as the pricing is right and security is guaranteed,” said Harris.

Harris added that if the current economic and political environment continues in the next 12 months, prices will increase due to demand and limited stock.

RE/MAX Realty Centre in Zimbabwe expects increased activity in the market and has no doubt the property market is poised for further growth.

Property broker and owner, Rutendo Rutendo whose franchise celebrated a year of operations in Zimbabwe said in the next six months, they expect a positive movement in the Harare property market as the country starts to see more of a general economic upturn.

“The housing backlog in Zimbabwe, especially in Harare, hampered by lack of finance will be a key market driver over the next five to 10 years,” said Rutendo.

Rutendo said the Harare property market is a buyers’ dream at the moment with cash buyers calling the shots, a sentiment supported by the Knight Frank Africa Report 2011.

He said most property transactions are cash sales and because of the efficient deeds office system, transferring a property only takes between a week and two.

“Limited stock is driving prices up with some property prices having shown appreciation over the last year, some by as much as 30 percent,” said Rutendo

Source: Property24.com