Three years ago estate agents said an average tenant moved after about a year and half due to the continuous rise of rentals as the local currency lost value against major currencies at an alarming rate. Those who were paying rentals in US dollars then were said to have stayed a bit longer.
“The dollarisation of the economy has resulted to tenants staying in the same property for a long time. There are however some landlords who have reviewed their rentals upwards (in US dollars) when all economic fundamentals are pointing the other direction,”
Tenants, who are near prime amenities like schools, shops, public transport and security with no water and electricity problems have had every reason to settle in and stay where they are for many years, even when rentals are adjusted.
The Estate Agent Council of Zimbabwe said between 2004 and 2007 there was a lot of movement in residential areas as many informal activities resulted in the property market being distorted.
“In some cases rent was being paid in fuel coupons or groceries, which were equal or more than the value of the local currency which was required each month using the prevailing official rate.”
Zimbabwe endured the longest and most severe period of hyperinflation since Germany in the early 1920s resulting in the currency being rendered useless.
During the period under review the local currency was revalued three times removing 12 zeros to try and tame inflation.
“Movement slowed down during the first half of 2008 as most landlords virtually started to charge in US dollars refusing to accept the local currency.
The fact that fuel coupons then, were seen as a stronger currency than the official Zimbabwe dollar was testimony to a nation in agony. Rentals rose by more than 20 000% inside one month.
While the dollarisation scheme has been described by some analysts as solution it was said to be unworkable.
“It has been tried before by other countries that have suffered hyperinflation. But it always failed to fix underlying problems and can, at best buy some time for an unpopular and failing government.”
Potential homeowners who had ready cash then also distorted the market as they were willing to pay what was being asked without any negotiations.