BULAWAYO, February 16 (The Source) —Property returns in Zimbabwe have plummeted to ‘alarming levels’ with rentals falling by as much as 50 percent and defaults above 40 percent in some cases, an industry official has said.
The Estates Agents Council chairman Oswald Nyakunika told The Source that returns on property investments have been hit by high default rates which are over 40 percent.
“I am advised rent reductions in Harare are much higher at about 50 percent in some cases. Landlords have conceded in order to keep properties occupied and avoid voids. A major driving factor has been tenants’ inability to pay current rent levels.
“The default rates are as high as 40 percent and increasing. The only way to stem the tide is to reduce rental levels. We are unlikely to see much change in 2016. It will go down as one of the most difficult years,” he added.
Nyakunika said the Zimbabwe has serious cash shortages.
“But I think our problem is little internal production and reduced exports in the face of increased imports. The balance of payments is heavily tilted against us. Agriculture, which is supposed to be our major economic mainstay, is performing poorly and the drought is not helping,” he said.
He said property remained the best investment sector compared to money and equity markets but there has been little development.
“Major developments have largely been residential schemes by banks and other financial institutions. Most housing development have been by individuals building own houses at their own pace in view of no mortgage funding. We need huge capital injection into the economy in general coupled with property development. There is need for investment into infrastructure development,” said Nyakunika.
“Property is the safest investment but as I said we need huge infrastructure development in servicing the land ready for building.”