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Enacy Mapakame
FBC Building Society says mortgage lending remained subdued during the year to December 31, 2022 due to the economic challenges caused by the intermittent inflationary pressures.
The country experienced high levels of inflation and foreign exchange rate volatility during the first half of 2022, prompting fiscal and monetary authorities to intervene with a coterie of measures early in the second half of 2022 to stabilise the situation.
Additionally, power supply disruptions continued to impact business operations negatively. Efforts are being made, however, to boost power generation through the construction of additional power-generating units at Hwange.
The real estate sector was not immune to the challenges experienced in the economy during the year.
“Mortgage lending remained subdued due to a reduced appetite by the business to lend on a long-term basis in the current inflationary environment,” said FBC Holdings group chief executive officer Dr John Mushayavanhu.
Activity in the sector remained soft throughout the year 2022. Commercial properties’ void rates in the central business district remained high with property owners converting office space to retail space in an attempt to boost occupancy levels.
The residential property market, however, remained active with a number of developments taking place across the market. The group is participating in this space through the Building Society’s housing development projects as the property sector has remained a viable hedge against inflation.
“The building society has increased its investment properties portfolio, which is strategically held to anchor capital and increase rental income generation,” said Dr Mushayavanhu.
Meanwhile, the Building Society is now leasing off its housing units in the Fontaine Ridge Phase 1 A scheme, with 107 units out of 150 units having been taken up as of 1 March 2023. President Mnangagwa officially commissioned the project last month.
It is anticipated that all units will be fully occupied within the first quarter of 2023. A total of 267 units have been completed under the Fontaine Ridge Housing project in Harare.
Dr Mushayavanhu revealed that a new construction project was embarked on in Zvishavane during the period under review, with 98 semi-detached cluster units nearing completion.
He said: “The Building Society will continue to seek opportunities to increase its contribution to property development in the country.”
During the year under review, the building society achieved a surplus of $6,7 billion, representing a 191 percent increase on the prior year surplus of $2,3 billion.
The unit, Dr Mushayavanhu said, will continue to be active in the property development sector, complementing the government efforts to increase housing stock in the country in line with the National Development Strategy (NDS1).
The country has a housing backlog estimated at two million and Harare alone in need of nearly a million units as demand for affordable housing remains high. Demand for low-cost housing in urban centres has been on the increase in the past decades driven by the rural-to-urban migration, as people search for employment.
The trend is not unique to Zimbabwe but prevalent across the world and is expected to worsen in the coming decades. The United Nations Population Fund (UNFP) says urban centres are already home to more than 50 percent of the world’s population, and by 2050, the percentage is expected to reach almost 70 percent.
Online Reporter