Michael Tome Business ReporterFIRMS in the real estate sector say demand for properties continues to rise as individuals and companies seek sanctuary in property assets to hedge against spiralling inflation.
On the other end property owners are said to be holding on to their properties amid strong fears that they might not be able to replace them due to the continuous price increases.
Zimbabwe’s inflation has been on an upward trajectory since the implementation of a myriad of monetary and fiscal reforms by the Government and the Reserve Bank of Zimbabwe last year.
As it stands, inflation has climbed to over 500 percent as of February 2020 compelling individuals with huge sums of money to invest it in property so as to maintain the value of their money.
Residential land in the capital Harare is slowly reaching complete scarcity, triggering steep prices for the remaining pieces of land particularly in the affluent residential areas.
Harare’s growth has lately seen the city encroaching into nearby rural district councils land, which include Mazoe in the north, Goromonzi in the east, Zvimba in the west and Seke in the south.
In an interview, Integrated Properties Chief Executive Officer Mike Juru acknowledged that individuals and companies alike were purchasing properties at a faster rate than in the preceding years.
He said, “People are investing in property as a hedge against inflation since it is one of the best hedges against inflation.
“Right now we actually have limited stock (properties) as more individuals want to invest in property, we have more buyers than people willing to sale, because people are hesitant to sale since they doubt if they will be able to buy another property for replacement.”
He, however, bemoaned town planning laws, which are not accommodating the construction of vertical structures (multiple storey buildings) to maximise the value of land in the urban residential areas saying it is compromising the value of land.
“Apparently we do not have enough stock, that limited stock has led to an upsurge of land price, in Borrowdale the prices for land stood at US$22,50 per square metre for a long time but they have gone up to US$45 now because land in those areas is no longer available.
“In the long run we need more coordination with authorities because we need to revisit our town planning laws and amend them so that they accommodate building of vertical structures to save land,” he said.
In terms of the rental properties, many property owners have subjected their tenants to constant rent reviews matching the spiralling inflation and descent in value of the local currency.
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