Market reports prepared by Integrated Properties.

PROPERTY MARKET REPORT Q2 – 2020

Office Sector

In the previous year, office space uptake has been poor as a result of the depressed economic climate in Zimbabwe.
Occupiers have been struggling to meet rent and service charges and the levels of arrears were generally high. Defaults in the office sector have increased significantly with demand declining due to the underperforming economy. With the pandemic in effect, the office sector’s chances of recovery are blurry. The outbreak has put pressure on the office space market and rental growth as a result of low economic activity and reduced business activity. Access to the Central Business Districts (CBD) was a challenge putting pressure on the performance of properties within the CBD highly affecting the sector. The sector’s occupancy level is estimated at 60% for the bulk of the office buildings in the CBD and this is projected to decrease as companies adopt technology for remote working and voluntarily surrender space surrender.

Observed rentals in the office sector achievable in US$ are as follows:

rental research

Download the full Property Market Report Q2 – 2020.

Q1 report cover

PROPERTY MARKET REPORT Q1 – 2020

Mortgage sector

Mortgage loans from December 2017 constituted an average of 12-14% of the total productive sector lending.  There was a sharp decline from a double-digit figure of 19.54% recorded in June 2019 before SI142 of 2019 5.65% in December 2019. This is because banks are increasingly adopting a cautious lending approach and thus not issuing out as much loans and further, the product seems greatly trailing behind inflation.

Figure 4: Percentage distribution of mortgage loans December 2017 – 2019

“Commercial property values are dependent on the rental cash flows, as such the organizational capacities to pay rentals will be compromised which will affect property values”

Source: RBZ Monetary Policy statements

Mortgages returns remain negative in real terms with inflation above 500% while interest rates now at 25%. Secured lending will remain viable either way as any default the borrower loses more and banks would benefit more from defaults when they repossess.

Download the full Propety Market Report Q1 – 2020.

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PROPERTY MARKET REPORT Q4 – 2019

ECONOMIC OVERVIEW

Zimbabwe economy remains caught in a downward spiral driven by poor fiscal performance, exchange rate induced price increases, shortages of foreign currency, severe drought and Cyclone Idai.  Economic conditions worsened as witnessed by government’s revision of 2019 growth projections from 3.1% to 6.5% especially in mining and agriculture, which experienced double-digit declines. Inflation remained relatively stable at low levels averaging below 10% from 2009 up to third quarter in 2018 after the announcement of the October 2018 Monetary Policy. The separation of the accounts intensified the multi-tier pricing and inflation figures rising with the last being published at 175.7% mainly driven by effects of monetization of past fiscal deficits, speculative pricing and the continued local currency depreciation. Inflation remains highest in the region as depicted in Figure 1.

Figure 1: Regional inflation rates 

Regional inflation rates graph

Source: Trading economics

To curb the spiraling parallel exchange rate premiums and ease the inflationary pressures, government in February 2019, formalized the trading of foreign currency through introduction of the interbank rate at 2.5 and licensing of the Bureau de change. In June 2019, the country witnessed the removal of the basket of currencies making the Zimbabwean dollar the only legal tender through SI1 142 of 2019 which aimed at strengthening and restoring confidence in the local currency. Additionally, the Reserve Bank of Zimbabwe adjusted the overnight lending rate from 50% to 70% at the beginning of the quarter and consequently reducing to 35% in November.

Download the full Peopert Market Report Q4 – 2019.