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Property market goes for forex

Ngoni Chanakira

LANDLORDS owning designer properties in the leafy suburbs of Borrowdale, Highlands and Mt Pleasant are laughing all the way to the bank as they are now illegally renting

out their mansions in United States dollars.

In Zimbabwe it is illegal to charge for goods using foreign currency. It is however permissible to peg items in foreign currency in which case the Zimbabwe dollar equivalent is then payable.

Asked what was being done about the issue Estate Agents Council chairman Tavenganiswa Mabikacheche said the matter was supposed to be handled by the Reserve Bank of Zimbabwe (RBZ).

“We have not received any complaints from tenants and as such we cannot act on the issue,” he said in an interview.

“Unless we receive a complaint we cannot do anything. Our role is to deal with complaints from tenants unhappy about their relationships with their landlords. The Reserve Bank deals with foreign currency issues and would be better placed to answer your questions.”

The RBZ said questions on the matter should be put in writing.

The latest developments come as landlords, especially those living abroad, are snapping up properties using foreign currency earned in the West.

Thousands of locals, including top professionals, have quit the country to sometimes take menial jobs in the United Kingdom, the United States, Australia and in neighbouring South Africa in search of elusive foreign currency and to escape Zimbabwe’s economic and political uncertainties.

The Zimbabwe dollar is struggling against the world’s major currencies making the parallel market a norm in the country.

The local currency is trading at a minimum of $2 500 against the greenback, $3 500 against the pound sterling and about $350 against South Africa’s rand on the parallel market.

Houses are being advertised in newspapers for between US$300 to US$1 000 a month, translating to between $800 000 and $2 million in Zimbabwe dollar terms.

The Zimbabwe dollar is however officially pegged at $824 against the US currency, $1 300 against the pound, $105 for the rand and $160 against the Botswana pula. This arrangement has riled the business community especially the mining and tobacco sectors.

Investigations by businessdigest revealed that landlords were now avoiding registered estate agents preferring to advertise their properties and handle their own sales.

A four-bedroomed home in the upmarket Highlands suburb along Glenara Avenue advertised as being “very good for diplomats” was asking US$300 with the amount payable in US dollars “only”.

“We are only interested in United States dollars,” said the agent. “This is an expensive property and we are interested in diplomats who are more responsible than locals.”

He said he did not care whether it was illegal or not to charge in foreign currency because “everybody is doing it”.

“All chefs are doing it,” he said. “Investigate more and you will discover a shocking number of individuals are doing the same thing. Nothing is being done about it. That’s Zimbabwe for you so just leave me alone. It’s nothing new.”

Another property being leased out by Alex & Webb Realty in Helensvale, also said to be ideal for diplomats, was going for US$550, the equivalent of about $1,1 million on the parallel market. The landlord wanted six months rentals in advance for the property.

“The owner wants United States dollars only,” said an official from Alex & Webb Realty, the letting agents.

It is reliably understood that some landlords are now requesting potential tenants to deposit the money in their offshore accounts.

Meanwhile, four bed-roomed houses in upmarket suburbs are now being leased for between $800 000 and $2 million monthly in Zimbabwe dollar terms. Despite the huge figure diplomats, chief executive officers, non-governmental organisation bosses and bank managers entitled to million-dollar monthly perks including company houses and luxurious vehicles are snapping them up.

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