Source: ‘Demand for mortages on the rise’ | The Herald July 31, 2018
Enacy Mapakame Property Reporter
Demand for mortgage loans in the country has been on the increase this year as Zimbabweans turn to real estate as a store of value, Real Estate Institute of Zimbabwe (REIZ) president, Mike Juru has said. He, however, indicated the market has been stagnant on the back of pricing stalemate spurred by currency risk and uncertainty.
“There is an increase in demand and supply of mortgage loans, however, the market is stagnant at the moment as sellers are not willing to reduce prices to meet buyers’ needs whilst buyers cannot go beyond what they have offered.
“We have situations where some sellers are requesting off shore payments or cash in United States dollars, which the buyers do not have hence halting transactions,” said Mr Juru.
Developments have mainly been skewed towards residential properties as new settlements continue to increase in urban centres.
On the commercial side, the sector is battling high voids, resulting in low occupancy levels reflecting negatively on rental incomes.
“The challenges we are facing could be a mirror image of the economy, where voids and defaults are a common feature.
“Beyond that, we are faced with a situation where agility in adapting to the demands of the market is resulting in mismatches in the market,” he said.
However, there is hope for the sector.
The property market is expected to experience a boon in the next few years on the back of increased demand for residential and other institutional developments that are in the pipeline while others have already been launched.
To achieve the growth however, Government and other stakeholders needed to take a leading role in creating a conducive environment and policies that promote the growth of the sector and attract investment.
Mr Juru cited recognition and respect of property as crucial in the growth of the sector while the issuance of title was also important to release dead capital, “which will see growth in the sector.”
“By and large, the government is responsible for the provision of infrastructure and with proper infrastructure in place, investment in the sector will balloon.
“There is need to address the liquidity crisis which has resulted in multi- tier asset prices.
“The Government also needs to come up with measures to rehabilitate street vendors as this is affecting investment in property in CBD.
“Lastly, there will be need for the government to work with the REIZ to bring transparency into the sector,” said Mr Juru.