HomeBusiness DigestLong-term mortgage finance the key — Pearl

Long-term mortgage finance the key — Pearl

THE property sector will not grow until building societies introduce long-term mortgage finance, Pearl properties chairman Dunmore Kundishora says.

Kundishora sees the unpredictable macroeconomic environment persisting in the short to medium-term, but remains optimistic that once finance houses “reinstate” long-term mortgages, the property market would
grow.
“The continued unpredictable macroeconomic policy environment is likely to persist in the short to medium-term, leaving it to individual company innovation to fully exploit the limited market opportunities in the property sector. In order to attain meaningful sustainable growth, the reinstatement of long-term mortgage finance by all major finance houses should see a major improvement in the performance of the property market,” Kundishora said.
Despite the economic stability brought by the adoption of multiple currencies, Kundishora says the sector is still to see meaningful growth.
The company says the reintroduction of limited mortgage finance by some building societies has ignited some activity in the sector, particularly at entry level.
The company’s rental income for the six months to June 30 stood at US$3,33 million from US$1,99 million. The average rental per square metre was US$4,71, a growth of 66% in the comparative period while rental yield was up 9,22% from 4,48% in the same period.
“The rental yield achieved of 4, 48% represented a marginal improvement from June 2009 yield of 4, 48%,” said Kundishora.
But the company says the growth is still below the average regional yields averaging 10%-15%.
Pearl properties reported a profit before tax of US$2, 72 million, a 26% growth from June last year. — Staff Writer.

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