ZIMBABWEâ€™S property sector is expected to remain largely stagnant until December because of high inflation and interest rates.
Property development flourishes in economies that have less that 15% inflation rate. Zimbabwe’s inflation is officially 11,2 million percent.
Simon Russell a director with Ideal Properties, said the fact that there has not been any meaningful property development in the city, indicates that all is not well.
“The property market has not witnessed any growth. Of course the rentals have been increasing but that is not how we judge growth,” said Russell
“We judge growth by the number of units that are being developed. As for the increase in the rentals, that is purely inflationary.”
He said the property market had not grown over the past eight years owing to the unstable economic condition.
“The future of the sector remains bleak unless the inflation rate stabilises and interest rates become viable. We (property sector) know that there will be an improvement if the political parties work together,” said Russell.
The number of stalled construction projects bears testimony to the gloom that pervades the sector. Investors are currently scared to commit their funds to new projects because of the economic instability.
“If one builds a complex, they will be lucky to get half of the buildingâ€™s replacement costs if they sell it,” said an evaluator with a local real estate company.
The current lack of progress has also worsened the infrastructural problems that have stalled development since Independence. Added to this is the issue of water problems that continue to haunt the city.
By Paul Nyakazeya