Nyakazeya: Would you say rentals have stabilised? And is there any justification for increasing rentals in a dollarised economy?
Chifamba: Rentals have stabilised and there now seems to be a defined rental pattern on various types of properties and their locations. There is no justification for increasing rentals at the present moment unless there are significant improvements on the property.
Nyakazeya: There has been an increase in cases of bogus estate agents and fraud when selling residential stands. As an industry what are you doing to reduce or educate people on this subject?
Chifamba: There has been a good number of literature in the media aimed at buyers in order to protect them from falling prey to bogus estate agents as well as sellers. We urge buyers to take this priceless info very seriously as a lot of people are being duped of their hard earned money by fraudsters. ‘Cheap things are expensive’.
Due to the fact that there are a few buyers on the market, buyers have taken that advantage to go out and hunt for property bargains, which at the end of the day will not be a bargain after all. Buyers should exercise extreme caution when buying a property and make sure that the information they have is correct about the property they intend to buy.
This fraud is not only perpetrated by bogus estate agents but of late, legitimate estate agents have also fallen victim to unscrupulous sellers who pretend to own the properties that they give to the estate agents to sell. So to fellow estate agents, we should be vigilant and weed out these unscrupulous sellers who threaten to bring our good profession into disrepute.
Nyakazeya: How has the resurgence of mortgages affected the property market?
Chifamba: Mortgages have had an impact in the sense that we have started seeing renewed activity in the market with a number of people trying to access them though sellers have been a bit resistant as people are yet to adjust to this way of selling their properties, sellers in the past three years had become accustomed to cash property deals and waiting for mortgages seems a toll order for most.
Nyakazeya: Won’t the resurgence of loans result in increased activitiesragarding properties on the lower end of the market to medium densities as many people do not qualify to be advanced with a loan of over US$50 000.
Chifamba: True. there is a lot of activity on the lower end of the market and stands. There has been a lot of demand in property in the range of between US$20 000 to US$60 000. But some companies have also started issuing loans to their staff members,mainly the senior staff members; this has seen a lot of interest in properties between US$120 000 and US$220 000. Stands have had their fair share of interest as a number of people having been opting for them with the introduction of building loans.
Flats have also been in great demand due to the attractive rental returns that is associated with them. Most investors have been looking at buying flats and leasing them out. Of major interest has been one and two bedroomed flats which have been ranging from US$25 000 to US$45 000 depending on the location.
Nyakazeya: What has been the capacity utilisation in the construction industry?
Chifamba: It has been low due to lack of government and private sector contracts, and the economic challenges the nation faced before dollarisation. The construction industry is currently operating at around 20 – 30% capacity.
Nyakazeya: How has dollarisation affected individuals and companies that want to build huge property portfolios?
Chifamba: Dollarisation brought many dynamics to the property market making it difficult for many players who built huge property portfolios on the back of rising inflation. Anyone who bought a property in Zimbabwe dollars from bank financing in 2008 probably got it effectively at less than 5% of its real value, while those that got mortgage financing in January 2009 got their property at less than 1% of the real value due to miraculous benefits and healing effects of hyperinflation.
Nyakazeya: Some say dollarisation brought with it liquidity challenges which slowed down activities on the market.What do you say to this?
Chifamba: Dollarisation did cause liquidity problems on the market last year resulting in property prices that had sky- rocketed to drastically come down due to effects of demand and supply.
Companies and individuals that had money during the first half of the year adopted a wait-and-see attitude in anticipation of a further reduction on property prices. This greatly affected the property market as there was little or no activity on the market.
During the first quarter of the year, a lot of tenants renegotiated their rentals downwards due to stabilisation of prices and reduction of prices of most residential properties. The period also witnessed a number of properties being abandoned as some tenants left without notice. However as the year progressed, the country continued to enjoy stability— economically and politically — and many people became more comfortable dealing in the property market.
The second half of the year saw institutions offering mortgage facilities to their employees; this led to significant movement on the market.