THE absence of long-term capital financing has restricted residential and commercial developments with projects being done in phases, while others are abandoned altogether, stakeholders in the real estate sector have said.
The real estate sector has been negatively affected by the acute liquidity crunch prevailing, as Zimbabwe is not using its own currency resulting in monetary authorities being unable to contain and manage the supply and demand side of the currency.
Status Assets Managers Real Estate managing director Tonderai Chabata said there was a sluggish performance in the property sector because there are very few serious new property developments.
"Property developers are now selling their projects on plan soon after acquiring the permit and necessary paper work for the project in order to raise initial capital to kick-start the projects," said Chabata. "This has seen aspiring home owners being made to pay huge developmental fees or exorbitant cession fees making residential stands expensive and beyond the reach of many."
He said that the property market remains subdued in the last quarter of 2013 after the harmonised elections as investors adopted a "wait and see approach" while the new government unveils its policies which are yet to take effect.
"Business creates liquidity and real estate creates wealth, hence we cannot talk of property development when business is in the intensive care unit. The government should work with business, and resuscitate the bleeding economy and make it start working again," he said.
The local property sector performance has remained lethargic in Zimbabwe due to a combination of variables, ranging from lack of long-term capital loans and foreign direct capital investment, as well as the absence of meaningful economic activity.
Said Chabata, "However, there are indications of activity in terms of property deals with the participation of financial institutions and corporate companies who are unveiling loans to their workers but the market performance remains sluggish."
Chinese companies have continued to dominate the country's major property development and construction projects, among them the National Defence College, Long Cheng Plaza in Belvedere and the National Sports Stadium.