Property sector remains resilient
ZIMBABWE’S property sector has remained resilient despite going through Covid-19 induced lockdowns largely as a result of economic stability, an expert has said.
Mr Bevin Ngara, Old Mutual Property Boutique general manager, speaking on a Business Weekly webinar on the State of Real Estate Sector, said due to the relative stability of the economy, prices have remained firm and demand is high.
“For some reason, the sector has remained quite resilient we haven’t seen worsening of voids, and we have actually seen rentals holding, and that could be because largely the economy has been on a recovery path, thanks to the agriculture season,” he said.
He added that there has also been a lot of changes in inflationary trends; therefore, bringing relative stability and people are able to do business.
“Unlike in South Africa, here in Zimbabwe, the already existing commercial properties are performing and they are already resilient in sectors such as retail and office park. People wanted to go to retail shops to get food and basics even during the lockdown period, therefore, we did not see a significant change in occupancy,” he said.
Mr Ngara said in terms of investments, the emerging trend is that investors are now looking for resilient sectors such as tourism, mining communities, tobacco warehousing, basically chasing the foreign currency.
“So any sector which is generating foreign currency right now is looking attractive, so if you have an export business, you find out property investors are finding it attractive and safer to provide you with commercial property space.
“Then also on the residential side we see a lot of activity in the high-density areas, largely on provision of residential stands,” he said.
He added that in the upmarket there is densification of areas, with people putting up townhouses, or
cluster houses as prices remain firm on high demand. Mr Ngara said due to the informalisation of the economy, there is now high demand from small to medium enterprises for reduced spaces.
“For property players, it makes a lot of sense to provide housing for SMEs. So SME centres, market stalls or reduced spaces are in great demand and performing extremely well and are also resilient.”
Speaking during the same programme, Mr Kura Chihota, an international property consultant said the Zimbabwean property market is largely a cash market and the cost of doing business is seemingly high compared to regional peers. He noted that the economy’s credit environment is going to improve if the current stability is sustained.
“The challenge is that providers of capital are trying to hedge, and the minimum lending rate at 40 percent for a mortgage loan is quite restrictive,” he said.