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Property market ‘misty’

Ngoni Chanakira

THE property market has not shown a clear direction as to where it is heading, says Real Estate Industry of Zimbabwe (Reiz) president Abraham Sadomba.

dana, Arial, Helvetica, sans-serif”>Sadomba is also managing director of Richard Ellis Africa.

He said however the recent relaxation of foreign currency transfer arrangements by the Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono would help boost the “rather quiet market into activity”.

Gono told Zimbabweans that they could now transfer their foreign currency from the diaspora through any money transfer agencies and receive $5 200 or the prevailing auction rate whichever was higher.

The auction rate stood at $5 302 on Tuesday this week.

Gono also said individuals could sell their foreign currency to any bank and no questions would be asked as to the source of the foreign currency.

Since the announcement more than US$10 million has been sent by Zimbabweans living in South Africa, the United Kingdom and the United States.

“Demand for the $50 million to $150 million properties is still high because this a natural transgression where you get someone from Glen View moving to Highfield,” Sadomba said. “However, we find that individuals do not have the cash to buy properties and with the high interest rates the market is quiet.”

He said the property market had been a hive of activity because of speculation by individuals selling their foreign currency on the parallel market about six months ago.

While the Zimbabwe dollar was pegged at $824 against the United States greenback, it was selling at $7 000 on the parallel market.

“Many individuals with access to foreign currency were snapping up properties because they could afford to do so cheaply then,” Sadomba said. “The demand has however dropped off now that sanity has returned to the market. We however hope with the new money transfer regulations, individuals abroad will send money to buy properties back home.”

Many commercial banks were using the RBZ’s liquidity support window to make commercial investment decisions on the misguided assumption that the central bank would eventually cover their liquidity shortfalls.

In some instances that support from the RBZ was being applied towards extending loans for speculative, personal consumption or asset acquisition purposes which was immediately stopped by Gono when he took over in December last year.

Sadomba said activity on the industrial property side was active and demand was up.

On the commercial property side however there was “no movement and no one is selling”.

“Individuals are hanging onto their properties waiting for prices to come down,” he said. “Some of the prices are pitched too high and so no one is buying. However occasionally we get individuals reducing their prices because they would have sought for too much.”

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