Unpacking lower market housing trends

properties under US$45 000 to this bracket.
The majority of the properties have a basic finish and smaller yard space. These properties are ideal investments as they have a quick turnover and can be profitable, without a significant capital injection normally required in the other property segments.
They have a competitive Annual Rate of Increment (ARI) because of the lower market prices and generally a small price increment will reflect a bigger percentage change.
With the current liquidity crunch, lower market housing has the largest number of properties paid for in cash.
Those with full title deeds also benefit from mortgage finance available, making them extremely lucrative.
A significant number of properties in these areas have council cession title with considerably lower monthly rates paid to the Harare City Council.
These properties turn over quickly as a result of their ease in title change, however, they also make those with title deeds more expensive as they benefit from mortgage finance.
Lower market housing generally provides a cash cow opportunity for property investors.
Taking into cognisance the table reflecting Property Price Average (PPA) and ARI, we find that Westlea has the highest price average.
The majority of the lower end market is made up of “high-density” suburbs, but Westlea can be classified as a “middle- density” one.
With higher council rates and slightly bigger yard space, Westlea is naturally inclined to demand the highest price within the lower market.
However, it does have a relatively low ARI owing to its relatively steady average asking price.
In Harare, the area with the highest ARI is Mbare, a popular high-density suburb right on the verge of the Central Business District (CBD).
Mbare offers high commercial potential and a close proximity to the CBD.
It also bears a somewhat legendary status with Harare residents and is in high demand.
This in turn gives it a high PPA in the lower market and a high ARI as well. Mbare is also the suburb with the most number of people per square metre, making it the highest in density.
Epworth and Dzivarasekwa record the lowest PPA, owing to distance from the CBD and lesser development of infrastructure.
These are the areas also hit hardest by power outages and the ongoing water crisis. Not only do they record the lowest PPA, but ARI as well, reflecting low demand for property in these areas.
They do have a high density of people, however, and provide a commercial investment opportunity by embarking on provision of basic food and entertainment needs.
With a bigger budget, one can develop infrastructure in accordance to council stipulations to attract more clientele and gain more market share in these areas.
Areas such as Workington where properties may be converted to industrial and commercial use benefit in better pricing.
Finding housing in such an area is tough as there is minimal residential allocation, and this means property prices are driven more by the commercial value to the land as opposed to the residential.
Demand is not as high, but property prices in this area are within the early to mid thirties range.
There are suburbs with different parts demanding different prices, as is the case with Highfield.
It is split into areas that include Lusaka, Engineering, Jerusalem, Cherima, Machipisa and Old Highfield.
Old Highfield boasts bigger yard space and a lower density of people in comparison to other lower market properties while Cherima has a higher density of people per square metre and more compact smaller yards.
An average house in the latter part of Highfield will set you back US$18 000 while the former will take you back up to for US$45 000.
When all these parts are amalgamated to create the below table-defined Highfield, they produce a mean of US$30 000 for the average house.
Noticeably, there is a smaller percentage difference in the highest and lowest PPA for the lower market than in other segments of the market.
This has to do with factors such as material input, construction time to erect these structures and in a significant number of cases council’s subsidising to meet the current housing demand.
The stand sizes are small but do command a high average price per square metre.
The most important purpose of lower market housing is to meet the national housing demand.
Council at the most has a backlog of 70 000 plus people on its housing waiting list. While the upper and middle market demand higher investment capital with limited number of accommodated people per hectare, lower market housing allows for a higher volume of people on a smaller piece of land.
This function makes the lower housing market fundamental as it addresses the basic human right to shelter for the highest number of people.