After nearly a decade in the doldrums, Zimbabwe’s property market is booming once again signaling the fresh changes bearing on the country.
Powered by the use of the United States dollar for transactions, Zimbabwean buyers are paying cash for their home purchases as banks are not offering home loans.
Statistics released by the Global Property Advisory Services firm, Knight Frank via its latest research, the 2009 Africa Report and estate agents in Harare show that “the average house price in Harare is US$150 000 (about R1.5-million), compared to R933 300 in SA. Average prices in Bulawayo range from $100 000 (R1-million) for an up-market home to about $50 000 (R500 000) for a townhouse, and vacant two-acre plots in both cities vary between $25 000 (R250 000) and $35 000 (R350 000)”.
Although property prices in the country remain significantly higher in comparison to property in South Africa, buyers have not been deterred, purchasing property which is deemed a more profitable investment. The country continues to peg the rand against the dollar at $1 to R10, despite the rand firming considerably against the dollar to the official exchange rate of R7, 50 to the dollar.
Knight Frank regional manager, Eliusha Chabvamperu Phiri, pointed out that, “in Harare they sell at least three luxury homes a month”. According to Phiri, demand for property in Harare’s posh suburb of Borrowdale remains high as well as in other outlying areas such as Epworth and Chitungwiza.
“Buyers are scouting for homes which they can add to their portfolios and sell at a later stage,” Phiri added.
As local banks are not issuing home loans the sources for property funds remains unclear, with unconfirmed reports that the illegal diamond mining activities in Mutare’s Chiadzwa area are being used to spur on the property boom.
Real estate agent, Pam Golding’s Juliet Harris, the managing director for Zimbabwe said, “We’ve been operating in Zimbabwe for nine years and, during this time, I’ve never dealt with a home loan, it’s been cash sales”.
Foreigners doing business in Zimbabwe, especially Chinese and Russian nationals, have cashed in on the property boom buying up large chunks of property in the country as well. Buyers either transfer the full amount after completing the deal or can pay a 60 percent deposit of the price, settling the remaining balance over a two month period.
The prolonged years of corruption and mismanagement by President Robert Mugabe’s government stalled development in the property sector.