daniel chigunwe
Jotham Chiketa
Part 1
Economics is the study of choices that people, businesses or governments make when faced with limited resources, unlimited wants and needs.
On this issue, I am going to be analysing the aspect of rented property in the real estate economy. The dynamics are about choices which people or businesses and governments make when faced with limited resources.
Long ago, in great cities such as Harare and Bulawayo, the population was manageable, but over time, there has been a sudden rise in industries and commercial sectors which has caused some great numbers of people to migrate to the capital city for employment.
Before the sudden surge in migration, rented accommodation was readily available to people who needed it because of a balanced economy. The rented accommodation is classified as high, medium and low density.
In this regard, people make choices to live in high-density areas due to limited resources or cash to go to better density areas such as the medium or low.
Some people exploit the opportunity cost factor, where they may go and stay in areas near town such as Mbare not because its attractive or have better facilities, but because there are businesses which give them better utilities in the economy.
The rentals might be very high, but there is an advantage of greater business in terms of proximity to customers hence, they need to stay close to their line of economy, meaning the opportunity cost of going to stay in Borrowdale is substituted by the high-density location with a greater business in town for economic growth.
There is also the opportunity cost of staying in upper lower density places such as Borrowdale Brook, the rentals are very high there.
Some reasons are for prestige and the need to associate with communities which link them to high personalities with intentions of improving business and social trends.
‘Economic choices’ means that there is one alternative to be selected in favour of another. As I have mentioned before, the exercise involves three fundamentals central to the economics such as scarcity, choice and opportunity lost.
Scarcity
It means the finite nature and availability of resources whilst choice deals with people’s decisions of sharing and distribution of these resources.
The scarcity of rented properties may be because the government, local authorities, real estate and development agencies are not providing equitable rental accommodation to society as dictated by income levels. All these arms must ensure that all people have decent accommodation at all levels of society.
Everyone has a right to accommodation, which is affordable and habitable.
As an optional cost or even a higher cost, the market regulates itself automatically, because there are people who naturally want to reside in certain areas because they have been there since birth or want to shift to other places because of social behaviour, even for a new taste as long as their products are able to pay for additional.
At times there are service factors of security, where the demand of goods or services are greater than what is available on the market.
This limits choices available to the property seekers. In other circumstances, there could be severe shortages of suitable accommodation, resulting in them accepting high rented accommodation, or living in crowded areas and this can also cause squatting.
DISCLAIMER
No responsibility is taken upon the writer to anyone who uses this information. Any one who wants advice should contact the undersigned or any reputable organisation.
Jotham Chiketa is a member of the real estate institute of Zimbabwe and writes in his own capacity. He is contacted on an email: [email protected] WhatsApp 0773 323 624
Bongani Ndlovu