GOVERNMENT is planning to introduce a policy in which new residential property owners will not be subject to rent control for the first 10 years in a bid to lure investors into the country’s dull property industry.
However, property anal
ysts said rent controls should be phased out completely.
They said the policy will not revive the industry as a decade is not enough for investors to realise good returns on investments.
Since 2000, there has been insignificant investment in the property market — particularly residential — and the major obstacle has been rent control.
Players in the property industry say they are forced by the Rent Board to charge rentals that are not market-related, making it difficult for them to operate, particularly in this current volatile inflationary environment. The Rent Board is a government-appointed body set up to regulate the property industry.
“The policy is not good enough,” Abraham Sadomba, the CB Richard Ellis managing director, said.
He said even though the policy is still being circulated to various stakeholders, the fact is investors do not want rent controls at all.
“Investors will still turn to other investment options where there are totally no controls,” Sadomba said.
He said government should facilitate the increase in the supply of residential properties by removing controls to lure investors. This would have the effect of stabilising rentals.
There is a serious shortage of residential properties in the capital.
Sadomba said residential tenants have developed a tendency of reporting to the Rent Board whenever rentals are increased.
“We are currently increasing rentals for the industrial and commercial tenants by 80% every quarter and there are no problems,” Sadomba said.