Mixed reactions to rental hikes

economic analysts. Some landlords in Harare and its satellite towns have reportedly increased rentals by over 30 percent, with tenants in high-density suburbs being the worst affected.
Prominent Harare property analyst and columnist Mr Vengai Madzima of Wisdom Properties said yesterday the protracted rental increase is set to continue as long as there is no development of new property.
“There are few properties on the market with demand remaining extremely high, and this has contributed to an increase in rentals.
“In other words, the rental market remained extremely competitive, especially in the housing sector owing to high demand of rental accommodation due to the growth of young adults in our economy.
“Urbanisation and the steady but increasing rate of return of Zimbabweans from the diaspora has also significantly contributed,” said Mr Madzima.
He said that this had resulted in high demand for multi-family units like flats or clusters that not only offer security, but also lock-and-go options for this highly nomadic segment of the market.
Mr Madzima said it would be amiss not to mention the significant number of tenants defaulting on rentals.
It would be difficult for the Government to effect a freeze on rental increase, as some tenants who can afford are willing to pay through the back door.
Economist Mr Jonathan Kadzura said the upward trend in rentals was because some landlords were relying on the properties for livelihood due to unemployment.
“Residential rentals should be pegged at around 10 percent of general salaries and anything beyond that is not only unacceptable, but unaffordable.
“These unwarranted rental increases are set to fuel inflation, together with transport and utility bills,” said Mr Kadzura.
He said there was no justification for the latest wave of rental increase, as inflation had remained stable while there were no significant salary increases.
“Their only justification for increasing rentals has been demand. In the business circles, this is forcing small businesses out of premises and that is against the spirit if indigenisation,” said Mr Kadzura.
He took a swipe at the Rent Board for not stamping its authority in the face of blatant exploitation of tenants by unscrupulous landlords bend on making money out of their desperation.
Meanwhile, the Rent Board has said that its services are underutilised and urged affected tenants to approach their offices for redress.
A landlord who preferred anonymity defended the rental increases despite low inflation and no salary increments.
“Tenants do not look after properties properly, and every time they vacate I’ll be faced with a task of sprucing up the property at my own expense.
“Even the deposit they pay is not enough to cover the trail of destruction they leave behind, hence I have to increase rentals regularly to keep myself covered,” she said.
Economic analysts have warned that the unwarranted rental increases are set to fuel inflation to 5,1 percent by December this year, exceeding the Government’s 4,5 percent projection.
Presenting the 2012 budget last year, Finance Minister Tendai Biti admitted that housing related inflation rose following every review of civil servants salaries.
He said that this year the Government would invoke anti-inflation policy tools through co-ordination of review to utility tariffs, charges, fees and rates by quasi-Government institutions.