CONFIDENCE in Zimbabwe’s property sector has sunk to an all-time low due to the widening gap between seller preference and buyers capabilities, a new report has revealed.
This comes as the property market has remained subdued largely due to the effects of the depressed economic conditions that led to the streamlining of productive and other expansionary activities, erosion of purchasing power, job losses and deteriorating social service delivery.
Real estate firm Integrated Properties (IP) said the seller-buyer gap intensified in the last quarter of 2019 following the introduction of statutory instrument 142, which prohibited local transactions be done in foreign currency.
“Sales remain leaned to residential properties, while little activity has been noted in the commercial and industrial sector,” the company said in a research note.
It added that property prices in Zimbabwe dollars continue to escalate as the local currency continue to weaken against the United States dollar. Currently, most property sellers have withdrawn their properties from the market further slowing down activity within the sector.
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IP noted that properties in high density suburbs such as Budiriro, Glen view, Highfield, Kuwadzana and Warren Park were trading between $500 000 and $850 000 while areas such as Glen Norah and Kambuzuma were slightly lower between $450 000 and $700 000. Dzivarasekwa, Mufakose and Hatcliff continued to trade between $300 000 and
$400 000 while core houses were exchanging between an average range of $300 000 and $380 000.
On the other hand, medium density properties in the last quarter were ranging between $1 500 000 and $2 500 000 for properties in Waterfalls, Hatfield, Madokero, Zimre Park, Malbereign and Westgate among others areas under the same classification while low density ranged between $4 000 000 and $10 000 000 depending on location and design.
IP said the mortgage sector recorded a steady growth from the period 2009 but was interrupted by the economic shocks from the period 2016 to date.
“The sector remains sensitive to economic conditions, especially GDP and interest rates. Affordability of the mortgages and availability of properties in ZWL terms on the property sales market remain the biggest challenge. The market will thus remain relatively small,” the company said.
“Nonetheless, the residential demand continues to expand as population and urbanisation increases. “More activity is being noted in the high density sector especially for properties located in Harare and surrounding cities (towns) as demand for low cost housing continues to grow.” The significant distribution of mortgages to the low density sector is mainly attributable to mortgage refinancing activities by entities.
“The sector is still offering huge growth potential which can only be exploited if lending institutions consider backward integration by offering mortgages on their own housing stock (ready built housing units) and building finance. In this light there is need for financial institutions to partner with developers for the development of housing stock and repayment in stock,” IP said. newsdesk@fingaz.coSubscribe to The Financial Gazette