We Asked an Expert
HAVE you ever wondered what it truly takes to navigate Zimbabwe’s complex property landscape? From the surge in gated communities to the empty office towers in the city centre, the market is sending strong signals. To decipher them, we spoke exclusively with Desire Dube, the president of the Real Estate Institute of Zimbabwe (REIZ). In this candid Q&A, he provides an expert’s view on the challenges, the opportunities, and the future of building and investing in Zimbabwe. Here’s how the conversation went:
Qn: What are the most pressing challenges facing real estate professionals in Zimbabwe, and what solutions is your leadership advocating for?
Ans: High void levels for high-rise office buildings result in depressed rentals & low income for both lessors & property managers. Most high-rise office buildings are at a 50% level of occupancy. We are advocating for repurposing of buildings to accommodate alternative uses such as warehousing & residential flats. Low acceptance of the local currency in real estate transactions. This is exacerbated by the low acceptance of bank payments on sales of real estate as most sellers prefer United States dollar cash payments.
Qn: How does REIZ ensure that real estate professionals in Zimbabwe meet international standards? What training or certifications are essential for agents today?
Ans: We offer continuous professional training of all real estate professionals in Zimbabwe. In addition, we have local, regional and international synergies with other local, regional & international real estate professional bodies that offer training in real estate. Through our synergy with the Valuers Council of Zimbabwe – Zimbabwe became a member of the International Valuation Standards Council & this goes a long way in ensuring upskilling of local real professionals & matching with international standards. Furthermore, REIZ in collaboration with Zambia Institute of Estate Agents, Real Estate Institute of Botswana & Property Practitioners Regulatory Authority of South Africa is working on a memorandum of understanding that will attain standardisation of real estate training in the Southern African Development Community. It is worth mentioning that some of our members are registered with reputable international bodies such as the Royal Institution of Chartered Surveyors. These members have offered vast training to our members through continuous professional development in firms and real estate workshops. It goes without saying that REIZ is forging affiliation with the University of Zimbabwe and other local universities. Affiliations with universities are key in skilling, upskilling & reskilling.
Qn: How have inflation, currency instability, and economic policies affected property valuations and investment in Zimbabwe’s real estate market?
Ans: Currency instability distorts comparable evidence due to price fluctuations and inflation particularly for transactions done in a weaker currency. For instance, you transact today for ZiG40, then in two months that same property is now at ZiG400. To make matters worse, ZiG40 and ZiG400 would be insignificant when you want to benchmark it when executing a valuation. This was prevalent during the 2007 hyperinflation & 2020 to 2022. Currency instability creates a scenario where property sellers prefer a single stronger currency. This erodes comparable evidence for transactions completed using the weaker currency. Most parastatals require valuations to be done in local currency yet there are very few transactions completed in local currency. To make matters worse, auditors require valuers to utilise comparable evidence obtained from the currency of transaction and valuation.
Qn: What opportunities exist for foreign investors in Zimbabwe’s property market, and what legal or bureaucratic hurdles still need addressing?
Ans: Zimbabwe needs huge investment in student accommodation as most universities are struggling to accommodate students. There is still a huge gap in medical real estate particularly for areas outside Harare. It is worth noting that foreign investors can invest in offsite infrastructure. Our cities are failing to expand horizontally because of a lack of offsite water & sewer infrastructure. If synergies could be forged with local authorities – this would unlock massive real estate development.
Qn: With rising urbanisation and housing shortages, what strategies should the government and private sector adopt to improve affordable housing?
Ans: There is a need for collaboration between government and private sector on the provision of offsite infrastructure. Infrastructure is the largest cost in real estate development. It unlocks value in real estate – actually a property buyer pays for the infrastructure endowed on the stand. As such, affordable housing can only be achieved if the government chips in on the provision of offsite infrastructure.
Qn: How is Zimbabwe’s real estate industry adapting to digital trends like online listings, virtual tours, and blockchain-based property transactions?
Ans: Unfortunately, blockchain transactions are not yet legal in Zimbabwe. However, I understand that the government is working on legislative instruments that shall legalise and operationalise blockchain transactions and bitcoin. The real estate industry has moved from print advertising to digital marketing. This has been made easy by efforts from advertising agencies that have invested in digital marketing, virtual reality and artificial intelligence. A number of property management firms are utilising smart property management systems such as Propworx, MDA and classic estates.
Qn: Where do you see Zimbabwe’s real estate market in the next 5-10 years? Which sectors show the most growth potential?
Ans: The property sector has witnessed a boom in residential development and prices. However, there is little development of commercial and industrial properties. I foresee a scenario where we have more houses coupled with fewer spaces for industrial activities. To some extent, this has led to congestion of the existing city centres as there are no developments of commercial and industrial working spaces in areas that have been recently developed.
Qn: What current trends are you observing in the Zimbabwean real estate market, particularly in terms of buyer preferences and investment opportunities, and how are these trends likely to shape the industry in the coming years?
Ans: Buyers are now preferring gated communities as they offer enhanced security. Furthermore, most gated communities are well maintained and have better refuse collection. This has created a huge demand and high values for gated communities. This has seen a massive development of neat gated communities even in high density areas such as Aspindale Park in Harare. We might have a scenario where most new developments will incorporate enhanced security mechanisms.
Qn: With an increasing emphasis on sustainability, what role do you see for green building practices in Zimbabwe’s real estate market, and how is the Institute advocating for innovative solutions in property development?
Ans: Environmental, social and governance (ESG) is at the core of REIZ’s thrust and this has led REIZ to churn out workshops on ESG for its members. Sustainability ensures tenant satisfaction apart from cutting recurrent expenditure in commercial and industrial buildings.
There is a need for more promotion and incentives for green construction so as to boost its acceptance and incorporation. It’s worth noting that the government has banned the use of electric geysers on new construction & recommends the use of solar geysers. In addition, it’s worth stating that the government has reduced tariffs on the importation of solar products. The current energy crisis has fast-tracked the adoption of green energy, particularly solar installation.