REAL ESTATE TRANSACTIONS FACILITATION IN ZIMBABWE

1.       AMBROSE MATIKA

Ambrose Matika is a retired Mortgage Banker who is now affiliated to Kenan Properties as an agent. Kenan Properties is a reputable registered Estate Agency based in Harare but operates countrywide. Ambrose’s knowledge of the property market and the processes and procedures involved  enable him to facilitate property transactions while ensuring that the interests of the transacting parties are safeguarded. His continued linkages with mortgage lending institutions, as Executive Secretary of the Zimbabwe Association for Housing Finance, enable him to approach banks and building societies for mortgage finance where needed.

Emai: ambrosematika444@gmail.com

Mobile: +263772600084/+263712624820

Sadza.com +1 951-217-9832

2.       ZIMBABWE PROPERTY MARKET

Most Zimbabweans will be familiar with the broad residential property classifications in the country but, for the benefit of those that may not be very familiar, I will give a brief description, using Harare as an example. Residential properties fall into three main sub-sectors:

2.1       Low Density

Properties on stands in excess of 2 000 square meters in extent make up the low density segment where most of the homeowners are high income earning professionals and business people. In Harare, typical areas are Mabelregn, Marlborough, Waterfalls, Mount Pleasant and Borrowdale. Property attributes and sizes differ widely in this sub-sector but on average, a modest three bedroom house in the lower end areas like Mabelreign for example would be on the market for around US$110,000 while palatial dwellings in areas like Borrowdale are currently negotiating for figures in excess of US$1 million. Within the low-density areas are also up-market town houses in gated communities.

2.2       Medium Density

The medium density segment is where modest stand-alone houses are built on stands ranging from 300 up to 1 000 square meters. Typical areas in Harare are Msasa Park, Houghton Park and Southerton. Detached cluster homes and high-rise flats in these areas also fall into this category. House prices in these areas currently range from about US$55,000 upwards.   

2.3       High Density

The high-density sector, so termed because of the close proximity of the properties to each other is where stands do not exceed 300 square meters in extent and most of the dwellings are of basic uniform design produced under mass unit projects. Some properties in these areas have however, been developed to superior standards with fine interior finishes and fittings with solid security walling. Some typical areas in Harare are Highfield, Mufakose, Budiriro and Mabvuku.

3.      IS THIS THE RIGHT TIME TO BUY PROPERTY IN ZIMBABWE

Property values in Zimbabwe are depressed at present due to the unfavourable state of the economy and scarcity of foreign currency. Outlawing of the US$ on the 24 June 2019 introduced confusion into a property market that was already struggling to adapt to the effects of policy-maker interventions of October 2018 and February 2019. Sellers are reluctant to accept RTGS dollars and choose to hold onto their properties until there is a favourable change in the currency regime. The current situation is therefore a buyers’ market for holders of foreign currency. Post COVID 19 there will be pressure on property values, moreso if positive policy changes are made on the political and monetary fronts.

4.      STATE OF MORTGAGE MARKET

Lending decisions during the year so far have been largely influenced by uncertainties over interest rate patterns, rapid inflation and currency instability. Likelihood of default continues to rank highly on risk profiles. Some mortgage lenders have suspended loans for now while others are selectively making new advances to local borrowers for the traditional purposes of acquiring new dwellings and enhancing existing ones. A couple of institutions are willing to consider US$ mortgages to diaspora based Zimbabweans. Mortgage lending rates range from 26% to 36% depending, among other things, on the purpose for which the loan funds were required, the perceived risk and tenure.

5.       OUTLOOK

Indications are that the pre COVID 19 business environment will persist post the pandemic and into the foreseeable future unless fundamental changes are made to the currency regime. The property market will remain subdued as sellers continue to be reluctant to accept payments in the local and only legal currency. The market will therefore remain tilted in favour of holders of hard currencies.