MANY contradictory reports about property in the last few months have confused a market that is already difficult to analyse, particularly as there are virtually no reliable statistics available on property prices achieved in Zimbabwe.
However, we believe that relying on information on all property in one index is concealing vital information.
- Across the whole property sector the dramatic changes of the last few years have had vastly different effects on the different sectors of property.
- The commercial rent board is approving viable rents, whereas the residential rent boards decision appear to be based on social not financial considerations, on all property rented to Zimbabweans. If after legal fees and the inevitable delays you are lucky enough to get a rent board judgment, the messengers of court are now charging approximately US$1 000 to evict a tenant.
- Although there has been a drop since last year in some prices the cost of proper maintenance and the required improvements will prevent many properties from achieving a viable return, even when the economy is slowly improving.
- There is a dramatic difference between the market in areas where multiple occupation, no maintenance and a decline in services has become the norm, and property that is in sought after areas that is in good condition.
- Some property is therefore already increasing in prices despite the limited volumes of all sales and could well improve substantially when loans become available in four to six months time.
- Many properties however are still not achieving the prices owners are demanding, despite the lack of maintenance and the areas their homes are in.
- Many residential property owners who are abroad or are moving for financial reasons, still refuse to face the major impact renting will have in our current legal environment on the value of their homes. Holding onto a home where the rent cannot cover maintenance and costs, in the hope that our anticipated national economic recovery will boost the value of their investment faster than it is deteriorating, is an error we see occurring on a daily basis.
- As with most sectors of our economy there are now many informal and new small businesses coming and going in the property sector, and a deluge of misinformation is available from many individuals. Whether renting or selling, unless it is a reputable registered estate agent do not sign anything without seeing your lawyer or accountant first. Please do not take advice from any Tom, Dick or Harry, especially if they are saying what you want to hear.
- This report was compiled by Seeff Properties. It is based on events between July and September with regards to residential, sales and rentals in the country. Spicer is Seeff Properties International Consultant. He can be contacted on email@example.com.