THE construction and real estate sector is projected to contribute less than three percent to Gross Domestic Product (GDP) this year due to challenges such as poor demand for office and industrial space, high mortgage rates and increased collecting fees because of legal charges on rental collections and evictions, Bart Real Estate has said.
The real estate company also cited high service charges from service providers such as local authorities, ZESA Holding and failure by tenants to pay rentals resulting in huge arrears as contributing to the sectors depressed operations.
"There was an economic leap from 2011 to present for mining, tourism and agriculture sectors however the growth is showing signs of slowing down. While the construction and real estate sectors have registered the least growth, which is evidenced by little or no development and non-existence of skyscrapers on the skyline," said Bart Real Estate.
According to the Construc-tion Industry Federation of Zimbabwe the construction industry is operating at about 40 percent capacity. Bart said the property industry has had several challenges which have limited its growth such as tight liquidity, insignificant infrastructural development. In most towns there are water shortages, and crumbling road infrastructure and electricity supply problems. "Retail property registered the highest growth when compared to industrial and office rentals. The rentals in 2012 have steadied with office rentals expected to fall due to the glut of space on the market," said Bart.
The company said there was a huge demand for serviced residential stands in most towns, but lack of key infrastructure has hindered the supply side of new stands.
Buying a house is no longer an easy task due to the deteriorating economic and social environment which has begun to impact on the suitability of a house as an investment.
"These social and economic dynamics include, the overcrowding in most Central Business Districts due to lack of accommodation and incre-ased unaffordable rentals, poor maintenance of properties in the neighbourhood, deteriorating infrastructure services, bursting sewer pipes exposing residents to foul smells and diseases, dry water tapes, and collapsing road infrastructure and poor workmanship during construction," the real estate company said.
A house is the largest investment most people will ever undertake in their life time, so it is imperative that one should be careful in the identification process. In some cases it is necessary to engage an independent specialist to provide professional advice before acquisition.
"Some general factors to take into consideration are proximity to facilities, quality of construction and maintenance, the quality of houses in the neighbourhood and services," said Bart Real Estate.