CONSTRUCTION costs for residential accommodation have ballooned by about 350% to between $100 000 and $250 000 per square metre during the third q
uarter of the year, an industry expert said this week.
Nico Kuipa, president of the Real Estate Institute of Zimbabwe (REIZ), said construction costs during the second quarter were between $50 000 and $70 000 but these had shot up considerable due to inflationary pressures.
Kuipa said the exorbitant construction costs had inhibited housing developments as it was now beyond the majority of the population to build houses.
“For low density areas, it now costs about $250 000 per square. For high density areas one has to fork out about half of that cost,” said Kuipa.
“One likes to think inflation has peaked and that it will be the same for property prices and building costs,” Kuipa said.
Inflation is currently pegged at 1 204,6% for August, an all time high.
Kuipa said many building projects had been abandoned or derailed because people were failing to meet construction costs.
As a result, he said, activity on the property market during the third quarter of the year had been constrained, with homeowners holding on to their properties.
Property prices had also risen during the period due to inflationary pressures.
Kuipa said residential properties were selling at a premium because of a shortage in the market.
The rising costs of construction and properties have had the effect of pushing up rentals, which many property owners are reviewing after every three months.
“Rentals have continued to skyrocket in line with inflation. Significant rises are being recorded in the city centre, were municipal rates are also rising at an alarming rate,” he said.