Mishma Chakanyuka, Staff Writer 
THE property market is grappling with a liquidity crunch, a situation that has been identified as the primary challenge currently plaguing the sector.
Liquidity tightening, a scenario where cash is locked in non-liquid assets or when high-interest rates increase borrowing costs, is at the heart of the issue.
Mike Juru, chairman of the Real Estate Investment Trusts Association of Zimbabwe (REITAZ), in a conversation with The Financial Gazette, highlighted the country’s liquidity crisis and the need for long-term loans for the property sector to flourish.
Mike Juru, is the founder and CEO of Integrated Properties.
Juru pointed out that last year’s annual loans from the Reserve Bank, of which only two percent were allocated towards mortgages, indicate a lack of funding.
He further noted that the short tenure of the loans being offered, typically a year and at most 24 months, is not conducive for property, a long-term investment expected to have 10-year and 25- year financing. Juru expressed hope that the adoption of real estate investment trusts could provide an alternative funding solution for the sector.
Gibson Mapfidza, managing director of Mashonaland Holdings, echoed similar sentiments, attributing the dryness of Zimbabwe’s capital market to global liquidity tightening. Mapfidza anticipates 2024 to be a challenging year, not just for Zimbabwe but globally, due to liquidity tightening and the fight against inflation.
He expects leading capital markets to reduce their interest rates by mid-year June, thereby facilitating global capital market liquidity. Mapfidza also highlighted the limited access to credit lines for local banks due to global liquidity tightening.
He believes that the property market mirrors the mainstream economy, which is currently facing numerous challenges. He also mentioned that offshore financiers are currently seeking projects with an export market, a category the real estate sector does not fall into due to its local nature.
Mapfidza concluded by stating that the devaluation of Zimbabwe’s currency and across Africa makes it challenging for the real estate sector to attract offshore financing.
