Zimbabwe property market update

Despite the significant economic challenges faced by Zimbabwe, it does have an active property market, although it functions in a unique manner according to Patience Munetsi, licensee for Seeff Zimbabwe.

The economy is rather complex and operates a multi-currency system, using the local currency (RTGS$ or ZWL) together with other hard currencies, but mainly the USD which is used as a base in terms of pricing.

The Reserve Bank of Zimbabwe (RBZ) recently raised the interest rate from 80% to 200% in a bid to curb inflation which is rising at an alarming rate. This has naturally made it more difficult for ordinary buyers who would normally be eligible for a mortgage loan.

Prices including that of property have risen notably due to the hyper-inflationary environment which means that property in Zimbabwe is generally higher compared to other countries in the region.

Buying and selling property in Zimbabwe
Buyers therefore tend to be professionals in senior positions with companies and who are eligible to receive substantial company or bank loans. Zimbabweans in the diaspora also make up a notable portion of buyers looking to invest back home or simply build up as part of their retirement plan.

Reasons for selling are varied, from downsizing for financial or empty-nest reasons to older buyers looking to relocate to nursing homes or to their countries of origin. Other sellers include absentee landlords and those selling for possible reinvestment.

Recently, buyers with an abundance of disposable income have flooded the market leading to a shortage of property and those which are on the market being expensive. Quality, well-priced properties are scarce which makes it a seller’s market and pushes prices upward.

These are properties located in good areas in the capital such as Harare North as well as Harare East. The fair selling prices in these areas would normally vary from USD150,000 to USD350,000 depending on land size and actual location, but are difficult to find. This is the popular price range among the buyers who are currently flooding the market with nothing on offer on our books. This price range is relevant to middle-class buyers and a portion of the upper-income buyer class as well.

Challenges for buyers and sellers
The biggest challenge is the presence of “bogus agents” who purport to have their best interests at heart, but eventually end up swindling them out of their hard earned investment. Both buyers and sellers should be highly cautious and only deal with registered agents to ensure protection of the assets and hard earned funds.

Pricing is also a challenge when sellers use listing prices which may not be an accurate value of their property because some agents list simply for the sake of winning the mandate which results in overpricing. This means that they turn away able buyers and have the property staying on the market for longer than it should or missing out on potential buyers.

For buyers, there is a lack of well-priced modern properties in the upmarket areas. 90% of properties in the sought-after areas are in old buildings and would need substantial refurbishment to modernise and make them attractive to buyers or for competitive rental investments.

Rental market update and challenges for landlords and tenants
The rental market is experiencing a shortage of fair-priced and well-maintained properties while those currently available on the market are mostly highly priced and not worth the rental being asked.

The average rental rates in the capital city, Harare, starts at USD270 to USD400 for one-bedroomed apartments, USD400 to USD600 for two bedrooms and USD500 to USD800 for three bedrooms.

Houses range from USD600 to USD1,000 for three bedrooms and USD800 to USD2,500 for four bedrooms. Rates depend on the location and condition of the property, and tend to be much lower in other areas/provinces due to the particular population demographics.

Harare is densely populated compared to the outer lying areas as people flock to the city in search of better economic opportunities. Fortunately, the shortage of modern properties is slowly coming to an end with new developments coming up although their rentals are still on the higher side.

Bogus agents are also problematic in the rental market and landlords and tenants must ensure they only work with registered agents. Challenges for landlords include late payers which are on the increase due to economic challenges which also means that properties are taking longer than usual to rent out. Zimbabwe legislation tends to favour tenants which is problematic when tenants are in breach.

Some concerns relate to landlords not investing in maintaining their properties as well as frequent rental increments as owners try to retain value of their assets.

Seeff Zimbabwe emerged as one of the top performers within the Seeff Property Group at this year’s Annual Licensee Award Ceremony held in May, walking away with three top awards, being:

1) International Licensee of the year 2021
2) Most improved International Licensee of the year 2019, 2020, 2021
3) International Rental Licensee of the year 2021

Working with Seeff Zimbabwe customers are assured that they are dealing with one of the top real estate brands in the country and SADC backed by strong systems and work ethic.