23 January 2013

Zimbabwe: Property Evictions Soar With Increasing Defaults

Bulawayo — Property evictions are on the increase countrywide, as tenants continue to default on rentals owing to a liquidity crisis in the economy, Estate Agents Council (EAC) chairperson, Oswald Nyakunika, has said.

This is despite the fact that Zimbabwe has the second lowest rentals in the Southern African Development Comm-unity (SADC) region after Mozambique, according to a recent report.

A recent comparison of rental fees for the property market compiled by Knight Frank indicated that rental fees per square metre for offices in the region ranged between US$16 and US$40.

The fees were at US$10 per square metre in Zimbabwe.

Rental fees for retail space ranged between US$35 and US$55 per square metre in most countries in the region but in Zimbabwe property owners charged US$15, the report showed.

Nyakunika said this week that the default rate for rentals continued to soar, forcing landlords to evict tenants. This had resulted in most office and industrial space becoming vacant, with property owners failing to get new tenants who could afford rentals due to depressed business.

Zimbabwe is still battling to recover from the 2008 economic crisis.

"The property sector is negatively affected by the current credit crunch, liquidity and cash crisis," said Nyakunika.

"The demand for residential space is high but lack of mortgage finance means people are renting rather than buying. There are plenty office voids and many tenants are defaulting on rentals," he added.

The EAC council chairperson said the property industry continues to be confronted by bogus and unregistered estate agents who are undermining people's confidence in the sector.

"We hope this will improve after election. At the moment there is crisis of confidence. It's hard to plan," he explained.

Nyakunika said the sector remained concerned with the continued closure of companies in Bulawayo.

"The assistance (Distressed Industries and Marginalised Areas Fund) is not materialising and not much will happen as regards injection of investment funds. This will only happen if confidence in the economy returns," he said.

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