Zimbabwe ended 2019 with the property market, just like any other markets, facing turbulence due to economic challenges that embed the country.
Such turbulence is predicted to remain with Mashonaland Holdings Limited Chairman Ronald Mutandagayi forecasting a sluggish property market for Zimbabwe.
“The development submarket remained subdued as cost of construction, largely sensitive to inflation, continued to rise,” Mutandagayi said. ” A number of construction projects have been put on hold, with developers adopting a wait and see approach, assessing viability and timing aptness.”
“Property yields continue to weaken as the property market cycle continues to trudge an extended trough and we forecast a sluggish market in the short to medium term.”
The chairman says monetary policy changes and market volatility resulted in a slowed-down property sales market.
“Sellers either withdrew their good grade properties from the market or continued to peg property prices against the USD (United States Dollar)”Mutandagayi says.
“Generally, this led to ‘over-priced’ properties that are unaffordable for prospective buyers. The mortgages market was literally frozen out.”
“Depreciating exchange rate and soaring inflation pressures negatively affected property income and thus property values,” he says.
Despite the challenges faced, retail and industrial sectors have remained relatively resilient according to Mutandagayi.
“Construction and maintenance costs surged as service providers continue to index their prices against the USD,” he says.
