To
substantiate
this
claim,
a
quick
online
survey
on
property
websites
will
make
you
realise
that
with
US$100
000
in
Zimbabwe,
you
might
fail
to
secure
a
decent
property
in
the
northern
suburbs
of
Harare
but
the
same
R1,8
million
will
fetch
you
a
modern-designed
property
in
a
secured
suburb.
Why
is
that
so?
In
all
fairness,
products
in
South
Africa
are
generally
cheaper
than
in
Zimbabwe.
This
explains
why
South
Africa
is
our
biggest
trading
partner
and
we
import
billions
worth
of
finished
goods
from
them.
Nevertheless,
I
want
to
focus
this
article
on
the
idiosyncratic
factors
that
make
it
expensive
to
purchase
a
property
in
this
country.
Having
been
a
host
for
a
real
estate
talk
show,
I
believe
I
have
accumulated
significant
insights
from
industry
experts
to
formulate
an
opinion.
No
alternative
investment
options
Considering
that
Zimbabwe
has
been
affected
by
at
least
two
cycles
of
hyperinflation
in
the
last
15
years,
monetary
assets
as
an
investment
option
become
questionable.
The
equities
market
albeit
tracking
inflation
and
outperforming
other
investments
in
some
years,
also
suffers
from
policy
inconsistency.
Considering
the
level
of
informalisation
in
the
country,
these
investment
options
are
not
even
considered
by
some
of
the
economic
agents,
who
in
other
countries
would
have
ordinarily
participated.
This
leaves
the
real
estate
market
as
a
sober
investment
for
the
general
investing
public
to
understand
and
consider.
Besides
property
returns
tend
to
track
inflation
or
harden
faster
in
the
case
of
currency
change.
I
opine
that
in
Zimbabwe
there
is
too
much
money
chasing
properties
which
results
in
expensive
houses.
High
cost
of
construction
Another
argument
put
forward
to
explain
why
the
Zimbabwean
property
market
is
pricey
is
the
high
cost
of
construction.
As
a
net
importer,
we
are
vulnerable
to
price
changes
in
the
producing
country,
in
addition
to
taxes
and
duties.
Albeit
the
recent
mushrooming
of
construction
manufacturing
plants,
like
the
tiles
manufacturing
company
in
Norton,
most
of
the
finishes
are
imported
from
Zambia
and
South
Africa.
These
costs
are
then
passed
down
to
the
customer,
making
properties
relatively
expensive
than
those
in
the
region.
Lack
of
a
proper
mortgage
market
The
norm
elsewhere
in
the
world
is
that
middle-income
earners
do
not
buy
properties
on
a
cash
basis.
They
are
helped
by
banks
through
a
loan
that
is
backed
by
the
property
and
this
loan
is
called
a
mortgage.
In
Zimbabwe,
due
to
the
unpredictability
of
the
operating
environment,
banks
have
moved
away
from
offering
these
long-term
loans
and
left
the
real
estate
market,
dominated
by
cash
buyers.
Without
a
strong
financial
systems
to
support
the
purchase
of
houses
by
individuals,
it
makes
purchasing
of
properties
very
difficult
and
expensive.
High
taxes
Although
I
have
not
carried
out
a
comparison
of
different
tax
structures
in
the
region,
the
property
experts
I
have
talked
to
have
expressed
that
the
income
tax
structure
makes
properties
expensive
locally.
This
is
more
so
since
the
introduction
of
S.I.
133
of
2019,
which
fostered
the
1:1
conversion
for
USD
and
Zimbabwean
dollar.
Construction
developments
that
were
started
during
the
dollarisation
era
tend
to
show
artificial
local
currency
profits
due
to
interbank
conversions
and
attract
higher
taxes.
This
also
makes
properties
in
Zimbabwe
less
attractive
and
expensive.
Lack
of
a
structured
rental
market
Zimbabwe
lacks
a
structured
and
formal
rental
market
that
is
offered
by
corporations
and
institutions
that
provide
lease
agreements
that
govern
the
relationship
between
the
parties.
The
reason
behind
this
could
be
that
corporates
felt
that
the
legislation
favoured
tenants
to
such
an
extent
that
it
hindered
the
market
forces
to
operate
and
determine
the
rentals.
The
role
of
such
a
rental
market
is
to
reduce
the
need
for
individuals
to
own
properties.
Currently,
most
rental
arrangements
in
Zimbabwe
are
verbally
agreed
upon
and
donot
offer
any
security
to
the
tenant.
This
forces
most
of
the
tenants
to
see
the
need
to
own
their
house
subsequently
increasing
the
demand
for
properties
and
pushing
prices
upwards.
In
conclusion,
there
is
a
formula
for
the
madness
of
the
property
prices
in
Zimbabwe.
Despite
the
construction
frenzy
that
is
currently
being
experienced
in
the
country,
it
is
quite
clear
that
the
demand
for
properties
outweighs
the
supply.
The
country’s
economic
blueprint
has
an
aim
to
deliver
225000
houses
by
the
end
of
2025.
I,
however,
opine
that
it
will
take
more
than
just
housing
delivery
to
correct
the
real
estate
market
in
Zimbabwe,
if
that
is
the
goal.
Hozheri
is
an
investment
analyst
with
an
interest
in
sharing
opinions
on
capital
markets
performance,
the
economy
and
international
trade,
among
other
areas.
He
holds
a
B.
Com
in
Finance
and
is
progressing
well
with
the
CFA
programme.
—
0784
707
653
and
Rufaro
Hozheri
is
his
username
for
all
social
media
platforms.
Post
published
in:
Business