HomeBusiness DigestProperty - Estate agents blast Gono over threats

Property – Estate agents blast Gono over threats

Ngoni Chanakira

PLAYERS in the property industry say they are not responsible for the current impasse between landlords and tenants that has forced the Reserve Bank of Zimbabwe (RBZ) to threaten revamping th

e money-spinning sector.

RBZ governor Gideon Gono, who promised to revamp the sector to stop rampant profiteering, recently gave the country’s real estate sector a tongue-lashing.

In his second quarter to June 30 monetary policy review statement, Gono accused landlords and estate agents of rampant profiteering.

“As monetary authorities we continue to note very disturbing practices by the real estate sector,” he said. “Such practices include fuelling of property price increases through quoting of prices in foreign exchange, notwithstanding the prohibition of this under the current exchange control regulations.”

He said it also included wanton hiking of rentals without reference to macroeconomic fundamentals and hiding under their intermediary roles between landlords who act on their advice and tenants who bear the brunt of this advice.

The governor also accused estate agents of externalising foreign exchange through abuse of the auction system and trading in the parallel market.

“To put a stop to these underhand practices, the Reserve Bank, in close cooperation with the relevant bodies, is introducing a comprehensive framework to track sources and applications of funds in the buying and selling of residential, commercial and industrial properties, with effect from August 1, 2004,” Gono said.

However, a senior real estate industry official this week said it was unfair for the governor to blame estate agents when most of the foreign currency deals were being conducted between landlords and tenants, bypassing their association.

“You have landlords and tenants making deals between themselves and not through us,” the official, speaking on condition of anonymity, said.

“There are major deals being conducted without us coming into the picture. This is especially true when referring to individuals living in the diaspora.”

He said landlords ask the estate agent to handle the municipality fees and general improvements on properties and not the monthly rentals.

“Some contracts do not include rentals,” he said. “You find individuals who only ask our members to deal with the general upkeep of the property for which an agreed fee is paid. Actually the foreign currency issue has now gone beyond us.”

Gono said consistent with the existing exchange control regulations, the RBZ would introduce more stringent measures in the property sector.

The move comes amid reports that some landlords and their tenants are circumventing RBZ regulations and charging rent in foreign currency.

Gono met with real estate members two weeks ago and reports are that he read the riot act to them.

“He was very frank about the problems facing the industry,” an estate agency official who attended the meeting said.

“We were pleasantly surprised to see some of the issues that we had asked him to highlight about our industry’s problems included in the report. However, we were surprised to be told that we are abusing our positions as far as foreign currency is concerned.”

Problems began when Gono took over at the central bank and there was a change of operations for the property sector.

Former RBZ governor Leonard Tsumba allowed landlords to peg their properties in foreign currency but charge tenants in Zimbabwe dollars.

However, Gono put a stop to this saying the practice was illegal.

In his monetery policy review last week, Gono proposed setting up a new scheme to help Zimbabweans in the disapora to invest in the property market using formal channels.

He said this scheme would be known as the “Homelink housing scheme”, following on the footsteps of his Homelink monetary programme that has met with mixed reaction worldwide.

“Where non-resident Zimbabweans or foreign investors are bringing in their foreign exchange into the country where those funds will be free funds and hence not subject to any government 25% foreign exchange surrender requirements,” Gono said.

Recent Posts

Stories you will enjoy

Recommended reading