ZIMBABWEANS living abroad, particularly in the United Kingdom, are currently the main investors in the local residential property market, according to the Zimbabwe Building Society (ZBS).
The demand for property continues to push the price of most houses beyond the reach of most people employed locally.
However, the low value of the Zimbabwe dollar against major foreign currencies has made them easily affordable for those earning, for example, British pounds.
ZBS mortgages and advances manager Solomon Magede said the company had helped and continued to help Zimbabweans working in Britain to purchase houses in Zimbabwe.
“A lot of people applying for housing loans are based in the United Kingdom,” he said. “They can comfortably meet the repayments and our other minimum lending requirements.”
He said houses being sold for thousands of dollars in the eighties and for hundreds of thousands in the nineties were now worth millions of dollars.
This automatically puts them beyond the reach of most people.
However, they remained affordable to those working abroad.
To qualify for a mortgage loan from ZBS, foreign residents, like local residents, had to satisfy the society’s normal lending requirements.
They had to pay the normal 25% deposit and an additional 10% to cover transfer, bond registration and valuation fees.
Magede said they also had to provide proof of income and satisfy the society that they were in stable employment.
Foreign residents had to be legally resident in the country in which they were employed and in permanent employment.
In addition to providing their salary slips, they had to have a work permit valid normally for at least five years.
Magede said there were plenty of people employed abroad who could meet these requirements. Many of them were nurses, doctors and engineers.
In calculating their eligibility for a loan, the society used the official exchange rate.
Even at the official rate, the salaries of most overseas applicants were generally sufficient to enable them to afford a mortgage loan.
Repayments had to be made in Zimbabwe dollars.
Magede said most of these overseas mortgage loan holders repaid their loans early, within a relatively short period.
Some of them had taken out more than one consecutive mortgage loan, gradually making their way up the property ladder.
They did this by either selling or renting out the property they had finished paying for and obtaining another loan for a more expensive house in a more expensive area.
Magede gave an example of a woman who, starting with the purchase of a modest property, had gone on to purchase two low density area properties, the latest of which was in a particularly expensive area.
He gave another example of a woman who had bought a property in a medium density suburb in Gweru and gone on to use this house as security for the purchase of a second house in one of Harare’s prestigious low density suburbs.
Magede pointed out the advantages of obtaining a footing on the property ladder.
He said many locally employed people unable to qualify for a mortgage for their ideal home would do well to purchase a cheaper property, probably a high density property which, while their income was increasing, would itself be increasing in value.
This would give them an asset they could sell at a profit at a later stage to help them purchase a higher priced property more to their liking, he said.