HomeBusiness DigestExchange rate worsens property shortage

Exchange rate worsens property shortage

Eric Chiriga

THE shortage of properties on the market continues to worsen as investors and sellers wait in anticipation of an exchange rate review.

ica, sans-serif”>John Spicer, an international consultant with Seeff Properties, confirmed the shortage of properties on the market.

“There is a desperate shortage of property on the market because property owners are reluctant to sell,” Spicer said.

Spicer said the shortage of properties, coupled with the high cost of building, were likely to keep property prices on an upward trend.

He said there was a need to review the exchange rate to stabilise property prices.

According to Seeff Properties, property prices have risen by between 10 and 45% since the beginning of the year.

Economic analyst, John Robertson, said property owners expect a devaluation of the Zimbabwe dollar to reflect the true value of the currency.

He said the prevailing environment did not encourage new investment in property.

Robertson said prices were still depressed and there was a need to review the exchange rate.

“The exchange rate should improve. Property sellers are holding on to their properties in anticipation of a devaluation,” he said.

The Zimbabwe dollar is currently trading at US$1 to $12 000 and GBP1 to $23 000 on the parallel market while on the recently established foreign currency auction, US$1 is trading at $6 077 and GBP1 at $11 541.

A fortnight ago, a severe shortage of properties was reported as sellers withdrew from the market to await the outcome of the just-ended parliamentary election.

Owners expected property prices to surge immediately after the election.

In a bid to boost the country’s property sector, Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono, introduced several initiatives, which include reducing building societies’ statutory reserves and launching an infrastructure development bank.

The concession to building societies was meant to release more funds for mortgages and allow building societies to focus on housing development programmes.

On the other hand, the infrastructure development bank would finance the construction of roads, sewerage systems and other preliminary activities, thereby expediting the servicing of stands.

However, property analysts say the majority of home-seekers still cannot afford to borrow due to high lending rates.

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