Zimbabwe Real Estate Snapshot
Credits: Africa Property News
Zimbabwean real estate is set to see an influx of foreign buyers having taken up the US dollar and with the country making it easier for foreigners to buy property in the country.
Zimbabwe is very much a sleeping giant in terms of property development with an educated population of about 14-million people, but positives are on the way.
This is according to Morris Hove, CEO of Property 101, which is based in Zimbabwe.
“The market performance was characterized by a high number of voids and defaults by tenants. The number of transactions through the deeds office went down compared with previous years. Another indication was the number of properties sold through the auction system which was down as a result of most people failing to service their mortgage obligations,” he said.
There is a great deal of interest in Zimbabwean real estate by foreign fund managers and investors and also government taking steps to improve housing delivery.
Hove believes there will be low mortgage uptake from Zimbabweans themselves which is why the country must support foreign investment.
Big international players are Zimbabwe’s guiding light. Many property investors from around the world are looking at Africa as an investment destination for the first time. Zimbabwe is beginning to be one of the tops of countries in the continent that these investors would consider being their first choice destination, as it has notable natural resources such as platinum and there is demand for new offices and retail offerings in the country.
“We are receiving interest from international players. Our property ownership laws are such that there is no distinction between a local and a foreigner in terms of property ownership. This is of interest to foreign buyers. As long as we maintain the US dollar as our official currency among other currencies, the appetite to invest in Zimbabwe will remain relatively high. A review or pragmatic implementation of the Indigenous Programme has the potential to spur more interest from foreign investors,” Hove says.
Foreigners can acquire Zimbabwean assets at lower costs of funding than South African ones. Also, some Zimbabwean properties are far cheaper than European, Australian and American properties.
Buying property costs are quite low at about 7% to Zimbabwe. The notary fees are around 4%, plus 15% Value Added Tax (VAT). Stamp duty is levied at progressive rates, from 1% to 4%, depending on the property value. There are concerns that President Robert Mugabe is often quick to raise taxes.
South African companies have enjoyed success in Zimbabwe recently. These include the likes of renowned retailers such as Pick n Pay and Mr. Price.
Many Zimbabweans still travel to South Africa in order to get new brands and enjoy bigger offerings. In some ways, Zimbabwe is a retail starved country, but that only adds to the future potential. A number of larger international brands like H and M and River Island have not yet opened in Zimbabwe, but are slowly showing interest.
Zimbabwe is trying to demonstrate demand for international retail, and many brands may take up space. This will always create opportunities for industrial property in the country. Zimbabwe is looking to initiate an integrated industrial warehousing solution. Storage property companies will serve middle-class people looking for warehousing storage options.
For now, housing developments are run by many smaller companies with state support, as well as big international players entering the market. Clearly, there are opportunities in Zimbabwe for companies in general and these include real estate companies.
A vote of confidence is when Dangote, the Nigerian group’s recent announcement that it would be building a cement plant in the country worth $400m. Dangote is led by Africa’s richest man, Aliko Dangote. Surely, other investors should grant Zimbabwe some attention.