adminas compared to all the other segments. Although our calculation used a bottom price, there is no cap to the top price one can attain on improvements to their property given that land size permits.
The average values and annual rates of increment on investment were prepared for the purpose of equipping the investor with knowledge of general market movements. The absorption rate is also included in the calculation as an indication to show how long a particular property was listed on the market. Whether this equates to a sell or removal from listing cannot be ascertained, it is presumed that it is a sell.
The information was obtained on asking prices prevailing in the 2012 market. Mortgage finance in this segment of the market was extremely limited, most supposed sells where cash or suspensive cash sells.
The price bracket implored for purposes of defining Upper Market Properties for the purposes of this article is a basic minimum of US$150 000 per property. The table is only limited to residential or former residential properties that have since been converted to commercial use. Ratios were calculated using an average property of four bedrooms, lounge, dining room, fitted kitchen, en suite bathroom and a separate bathroom. It is critical to understand from the onset that price variances in this market are determined by state, extras, allure and design of the improvements on a particular property and to a large extent location. The actual positioning of the property is of paramount importance as it has price consequences that vary markedly from other properties within the same catchment as a result of either the benefits or disadvantages a particular property offers.
What was commonplace in most properties within this segment that experienced a high turnover were certain allures like commercialisation prospects were absent was the impact landscaping had as a motivator to purchase. Extras like tennis courts and swimming pools with saunas or other extras are good inducements that assist in separating one property from the common ones offered at any given time.
The table takes into account 25 suburbs considered to make up some of the upper segment of Harare’s Property Market, although this list did not exhaust all areas.
We find that Belvedere has the lowest Property Price Average (PPA) among the Upper Market Housing at US$160 000. This is interesting in the sense that it was previously belonged to the middle market segment in terms of pricing but a result of the rapid commercialisation of the area increasingly gaining momentum in average pricing as a balance between the more strategically located properties and those ideal residential homes.
Greendale is divided into two different pricing categories — Greendale North and the rest of Greendale. The latter, which is the greater part of Greendale, is where most clusters and dilapidated properties are situated, while the former borders Chisipite and follows similar pricing trends. Based on the ratio in size of the rest of Greendale to North Greendale, we find the PPA is reduced significantly. Surprisingly we find that though it has the lowest PPA, Greendale retained the second highest Annual Rate of Increment (ARI) in 2011 at 15.7 percent.
The table goes on to indicate Borrowdale Brooke as having the highest PPA, with residential land per square metre here being much more expensive than anywhere else.
It also has the smallest average land size in the upper market. Such a phenomenal price on this land is largely determined by its exclusivity as the only fully developed golfing estate in Harare presently. Properties in the estate are not offered on the market as frequently as in its surrounding areas.
Admittedly there are some parts of other upper end locations that commanded higher property pricing than those advertised in Borrowdale Brooke.
Several exceeded the million dollar mark, but the overall average price of Brooke homes remained the highest at an average of US$415 000. Putting into consideration the current liquidity crunch and lack of adequate housing finance, price movements in the estate are not expected to significantly change as it recorded one of the lowest ARIs at 2012 with 5.8 percent.
The absorption rate was calculated using pricing rather than location. It followed naturally that the lower priced properties enjoyed a quicker absorption although the average absorption times were markedly lower than those experienced last year.
One anticipates a more vibrant market next year if measures announced in the financial policy that stimulate the resuscitation of mortgage finance are successful.
Vengai Madzima is a property investment consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected] or Facebook wisdompropertieszw
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