Property prices Slashed
PROPERTY prices for some properties have been reduced by between 20% to 30% of the pre-2012 economic boom era and a “buyers” market has been created whereby the buyers set the price of the properties, an official from Real Institute of Zimbabwe (REIZ) has said.
Responding to emailed questions by NewsDay, REIZ vice-president Siza Masuku said the current economic situation had created a buyers’ market as they dictate the terms and conditions due to their superior bargaining positions.
“Some property values have softened by as much as between 20% to 30% of pre 2012 economic boom era. I can say these are price corrections which are in tandem to the depressed economic activity. In the absence of affordable mortgage finance, development in this sector will be curtailed,” Masuku said.
The property sector recorded a boom in 2012 when the country had an economic boom characterised by a Gross Domestic Product growth period averaging around 7,5% between 2009-2012 and has shrunk to around 3,2%.
Masuku said asking prices of some properties on the market for sale were rather high and do not reflect the situation on the ground and this had resulted in some properties especially high value transactions being on the market for longer periods.
“In majority of times, we have noted that the price within which properties exchange hands are significantly lower than the asking price,” he said.
He said in the outlook demand for affordable housing in the country will remain high as existing structures are profit seeking and based on internal investments decision parameters of institutions.
“Current housing developments have been slow and low uptake from an investment perspective the pricing may be correct, but the thresholds are not economically viable. A large number of land developments are speculative investments and the delivery process is not adequately aligned with market conditions,” he said.
Masuku said REIZ was optimistic that the government policy and the deals that it signed in the energy sector, mining sector will result in the recovery of the economy.
“We are also grateful to the on-going process by the government in the realignment of the laws of the country as we believe it will serve as a catalyst for attracting foreign direct investment which the country is in dire need of,” Masuku said.
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BY VICTORIA MTOMBA