A look at Zimbabwe's property market

Even though the Zimbabwean property market faces many challenges, it has always been characterised by a high demand and a corresponding low supply – ensuring that the market has always been very active.

Patience Patongamwoyo, Seeff's Principal in Zimbabwe, says in the pre-dollarisation era (before 2009) the main buyers of real estate property in Zimbabwe were those in the diaspora and a few locals who had access to the US dollar as the local properties had become relatively cheap in real terms.

"After dollarisation (post 2009) the diaspora market suddenly crumbled as local properties became expensive in real terms. The high prices of property coupled with the liquidity crunch saw the market turn into a buyer's market.

With the advent of the new administration there are however great expectations to address the economic decline that should lead to normalisation of the market into a sellers' market.

Patongamwoyo noted that February 2019 saw the introduction of the real-time gross settlement (RTGS) dollar, with an official rate to the USD pegged at 2.5. It has since weakened to 3.0120.

"There has been a lot of resistance from sellers, all preferring to sell in USD. Many conditional sales have been concluded by attorneys, and since most banks are only offering RTGS dollars, this has reduced the numbers of buyers on the market to only those who still have USD," said Patongamwoyo.

She said that despite this, they are hopeful that once the market gains confidence in the RTGS and the correct market exchange rate is determined they will see sellers accepting mortgage bonds and the market will normalise.

"People from other countries on the African continent have always invested in Zimbabwe as the market is active, well-regulated, offers a fair return on investment and has the potential to improve. Title deeds can also be used to secure mortgages from financial institutions," said Patongamwoyo.

Who's buying – and how much does it cost?

South Africans, Mozambicans, Nigerians and Zambians, among others, have invested in Harare's northern and western areas. These buyers are usually employed by United Nations or entities that are associated with other NGOs.

"In the past three years we have also seen residential, industrial and commercial investment from the Chinese business people due to the Government's look-east policy," Patongamwoyo said.

The property expert said that in high density areas, such as Highfield, Budiriro, Kambuzuma etc, the entry level price for a small property basic four roomed core house is approximately US$25,000.00.

"In medium density areas like Westlea, Waterfalls, Bloomingdale, New Marlborough etc., the entry level is approximately US$80,000.00 for a two bedroom apartment or basic house.

In low density areas such as Harare North the entry value is US$130,000.00 to acquire a two bedroom garden flat.

The most expensive area is the Borrowdale Brooke which is a security estate that offers extras like a golf course and 24 hour security.

Here, vacant land can cost as much as USD $120 per square meter.

In terms of apartments and complexes, the most expensive areas would be Avondale, Newlands and Belgravia areas.

Like in the case of South Africa there is a high demand for security estates in Zimbabwe. These estates are mostly located in the Harare North area, but some are also being developed in medium to low density areas where there is access to municipal sewer connection.

Many banks like FBC, Stanbic, CBZ are investing in land and constructing security estates to let or sell due to high demand. Demand for commercial properties is anticipated to increase as the economy slowly begins to stabilise and starts to pull out of the recession which has been ongoing for the past 20 years".

Patongamwoyo said recent sales that their branch has made include land in Tynwald for clusters developments and commercial use. She added that there also lies great investment opportunity in University towns.

"University student accommodation has been in short supply with property owners close to these institutions constructing boarding houses accommodation for three students per room at US$100.00 per head per month. These exorbitant charges prove that there is a grave shortage therefore creating a great investment opportunity in University towns for investors".

Patongamwoyo concludes that there are also buy to let opportunities available mainly in the medium to low density areas, but it is mostly financial houses that are buying finished complexes or buying land and constructing complexes themselves and then letting them out.

"Demand for accommodation is very high within the medium to low density range being more appealing as the economic decline has not affected this group of middle and senior managers.

Rentals in medium density areas range between US$300.00 – US$700.00 USD per month, while rental prices in low density areas range between US$700.00 – US$2500.00.per month.

Smart Move opened their doors to the public in 2015 during the period the real estate industry – like many other sectors in Zimbabwe – was heavily affected by the economic meltdown. The company rebranded to Seeff Properties in November 2018.

A second branch in Avondale was opened in 2017. The team consists of 22 staff members, all with over 60 years combined experience in Real Estate. Long term plans include opening a third branch in Harare and to have at least one branch in the five major cities.