‘Opportunities laden in luxury property market’
Although the Covid-19 pandemic has had significant negative impacts on the local property sector, especially on office and commercial spaces, there are growing opportunities in the luxury real estate space.
Luxury real estate is increasingly a target for a number of global buyers and investors, and its an opportunity that Zimbabwean property developers can tap into, given the under-performance of other real estate segments.
Mid-last year, local real estate consultancy firm Integrated Properties projected that property values in the country could decline by between 30 to 40 percent by end of that year, due to the pandemic.
But Zimbabwe is yet to become a key player in the luxury real estate market, which is less prone to such value fluctuations.
According to the just-released study, State of (international) Luxury Real Estate by Luxury Portfolio International, of the 15,5 million consumers who indicated interest in purchasing residential real estate, 66 percent of that segment (10,3 million consumers) noted a desire to purchase a residence valued at US$ 1 million or more over the next three years.
While real estate prices vary dramatically from country to country, a viable luxury threshold is homes in excess of US$ 1 million.
The study focused on consumers in the top 1 percent to 5 percent income bracket of 17 countries, representing more than 30 million households.
It is clear that affluent residential real estate buyers see opportunities within their respective markets,”said Mickey Alam Khan, president of Luxury Portfolio International.
“We are noting a surge in buyers throughout many markets worldwide, where it continues to be a seller’s market in the luxury space vis-à-vis the previous year. We expect that trend to continue through 2021 — as well as the next couple of years — as buyers rush into the market. The ultra-luxury buyer perspective is that the current climate is getting stronger. In many markets, we see home values going up, and there is more interest in prime property.”
Said Chandler Mount, CEO of Affluent Consumer Research Co and research partner for Luxury Portfolio International:
“Real estate is an increasingly sensible investment at a time when financial and alternative investments appear potentially disconnected from traditional success indicators, like revenue and profit.
“Many luxury buyers all over the world share this sentiment, and the implication is a lot of money flowing into real estate in the coming year.
“Investment sentiment toward real estate is positive and outstrips other forms of financial investment,” concluded Alam Khan.
“This bodes well for developers and resellers, along with sister industries, such as home design, art and furniture.”
Neighbouring South Africa already claims a stake in the global luxury real estate market. But for this to be possible, there are certain guarantees that the South African authorities had to ensure.
For instance, foreigners can own immovable property in South Africa without restriction, although all foreign funds remitted to the country should be declared and documented, among other key factors.