BULAWAYO, October 1 (The Source) — Returns on property investments have been hit by high default rates which are over 40 percent, reflecting a worsening liquidity crisis haunting Zimbabwe’s economy, an official has said.
“Yields on property have been seriously compromised to such an extent that many property sellers have deferred selling to a later date,” the Estates Agents Council chairman Oswald Nyakunika told The Source on Thursday.
“We have also seen an increase in rental defaults and evictions. The void rates have increased tremendously and many tenants are applying for rent reductions. The liquidity crisis has affected business performances generally. The default rates are well above 40 percent and this has resulted in increased evictions and building voids,” he said.
Last month, First Mutual Holdings said in its half-year report that it was reducing rentals on properties to retain clients, a practise which has become common place in the sector.
Nyakunika said the fact that Zimbabwe’s domestic credit market was non-existent meant there were few options available to businesses and locals for accessing bail-out funds.
“That has affected the ability of businesses to pay their rent,” he said adding that the worsening situation in the property market was symptomatic of the situation in the rest of the economy.
“There is need to address the economic fundamentals if we are to come out of this quagmire. The hope is that the economic environment has hit rock bottom and the only way is up,” he added.