Property market in retrospect

However, compared to the previous period after dollarisation, the year witnessed a steady increase of movement on the market and a growing demand of certain segments of the market.
The first and second quarter of the year was characterised by slow movement of property sales on the market as the world underwent an excruciating financial crisis which witnessed property prices plummet in most developed countries including our neighbours South Africa.
However, this decline in property prices did not affect our local market as the variables responsible for the financial crisis, mainly the credit economy, is not entrenched in our “cash” economy.
Prices remained stable and some property pockets actually increased in value and demand.
The third and fourth quarter witnessed a steady increase in activity due to the increased availability of mortgages offered by local banks and companies as incentives and benefits for their employees.
This increased the demand for middle- and low-income housing causing a significant increase in pricing of those properties within that range with full title deeds.
The demand for properties with cession title or share transfer remained relatively low in this quarter. However, properties within the same catchment as those with full title deeds did benefit from the increase in value and provided the cash buyers on the market with a negotiating advantage for price reductions.
The availability of mortgages did not significantly affect the properties above the US$150 000 mark because a limited number of mortgages where offered and that part of the market relied mainly from traditional investors.
It did, however, benefit from the growth of other sectors in our economy like the mining sector and the slow but steady rebounding of our industrial sectors.
Although movement was slow, it was significantly better than previous periods after the dollarisation of our economy.
The rental market remained extremely competitive especially in the housing sector owing to the high demand of rental accommodation due to the growth of the young adults in our economy, urbanisation and the steady but increasing rate of return of the Diasporans to the country.
This 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. This witnessed an increase in pricing due to demand and this segment of property presently offers the highest return on investment.
It will be remiss to not mention the significant increase of tenants defaulting on rentals thus short changing investors.
This was owing to high demand that resulted in a lack of proper vetting processes by some investors because of high rental offers.
Commercial property rental demand was low for parts of the year because of the high prices demanded by owners of large and prime commercial spaces.
This resulted in many of the city malls and buildings going without tenants. The rate of defaulting tenants also increased because of untenable rentals and the general lack of liquidity in the market that witnessed many businesses struggle to survive.
Areas in the peripheries of the Harare Central Business District benefited from exponential increase in prices as most businesses opted to leave the CBD because of high prices and expensive parking and relocate to areas that were previously preserved for residential purposes.
The construction industry began to rebound as new developments sprouted in and around major cities. The main target for these developments was mainly for low and middle income residential properties. This also resulted in the proliferation of bogus housing co-operatives intending to take advantage of this desperate market.