adminby price definition of US$45 000 up to US$139 000. One may deduce from the table that most of these areas in terms of pricing are concentrated between US$50 000 and US$85 000. It is evident that the middle market property segment has the most number of suburbs and the highest overall Annual Rate of Increment (ARI) compared to any other market segment.
Middle market suburbs provide the best investment opportunities in our current economic climate. They have easier channels of financing in Zimbabwe, a fairly low market price and Property Price Average (PPA) and the highest ARI. Some local banks are issuing out mortgages the bulk of which fall below the US$100 000 mark increasing demand of properties in this segment with full title deeds. This increased demand had a ripple effect to those properties in the same catchment that do not have full title deeds, in some instances in the previous year facades of middle market property shortages where evident.
A number of companies and pension funds availed housing loans for their employees or members. These loans were predominantly between US$40 000 and US$80 000. This increased markedly the number of first time buyers in the market resulting in a steady increase of general asking prices as the majority of prevailing buyers were not seasoned investors
A significant number of buyers utilising the mortgage payment system in 2011 were not property investors in its strictest context but mainly home seekers. Very few individuals used these channels of financing to invest in property that had high annual rates of increment or return on investment. A few utilised available investment tactics that ensure value appreciation. The pressure premised on the desire to secure a property fearing that the mortgage window of opportunity may be closed. Although the reasons for investment varied, the beauty of the middle market is that it followed the economic laws of supply and demand and most properties within this segment have appreciated in value.
The availability of financing in this market segment translated to a clearer market pricing pattern in comparison to the more speculative one in the upper market. This resulted in a narrower ARI between 8,55 percent and 10,74 percent respectively. Many of these areas also hold a majority of properties under title deeds. This aids in securing mortgages with building societies.
The Avenues area has the highest ARI with a low PPA. This is because unlike all the other areas, PPA was not calculated using a three-bedroom property as the basis of calculation.
A general average was taken that included all properties from bedsitters to three-bedroom properties.
The area witnessed the most demand as variables like water and electricity supply coupled
with proximity to essential services where critical in investment decisions. Investors in these areas where also lured by the fact that the properties require minimal onsite supervision and normally offer lock and go options.
They are areas within the middle market segment that surpassed the US$100 000 mark where Emerald Hill, Avondale West, Eastlea, Belvedere, Greendale East, Msasa among others. Emerald Hill, Greendale East, Avondale West have within them spacious properties that compete with those found in the upper markets.
Eastlea, Belvedere and Avondale West are attractive to companies because of their proximity to the Central Business District.
In the case of Msasa, we find that most factory offices are located in this area and just like Milton Park and Eastlea, houses in this suburb are beginning to be bought for commercial usage, hence translating to an increase in PPA of houses in this area. It also shows a high ARI, signifying that the demand for property in these areas is growing.
In terms of investment, the middle market is lucrative as it offers a reasonable PPA with a competitive ARI.
It is more inclusive than the upper markets that do not benefit mostly from mortgage finance.
Unlike the upper markets there is a cap on return of investment. It remains prudent that one seeks advice before investing.
l Vengai Madzima is a property investment consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected]
Online Reporter