|PROPERTY REPORT FOR FIRST QUARTER 2012|
FIRST QUARTER PROPERTY REPORT
CONFIDENTIAL FOR SEEFF CLIENTS ONLY
The current cash flow crisis in Zimbabwe has stopped the rising sales and rentals values for the moment.
Price increases over the last 12 months have varied considerably between different types of property and different areas.
Currently sale and rental proceeds can be externalized, but the Exchange Control Act has only been suspended, and may be enforced again in the future.
Price and rental increases have and will be driven by replacement or building costs, which reflect the dramatic increase in the cost of doing business in Zimbabwe.
Despite the slow down caused by the cash flow crisis, properties in good condition with good security and water under $300,000 are still selling quickly.
Price increases last year were augmented by the increase in the number of loans from Building Societies and Banks.
Flats, cluster houses, and homes in good condition in good areas with security and all services rose by as much as 30% last year. However part built properties on unsuitable plots, overcrowded homes, and homes where there has been no maintenance only increased by as little as 10% or less.
Vast sums of money are being wasted by owners who build huge houses on unsuitable plots in the wrong locations. Many of these homes come on the market unfinished or with very poor finishes. Many of these owners may not even be able to recoup the costs they have incurred.
Security is also vital to the capital value, and homes adjoining open spaces or out of town are negatively effected. The provision of services can also affect the value dramatically. Houses with no municipal water and no borehole may sell for as much as 30% less than a similar home with a borehole and municipal water.
Although we have a respite during the rainy season, the uncontrolled drilling of boreholes , sale of water, and use of water together with the huge increase in the development and cultivation of wetlands, will soon result in dramatic increases in the cost of water, and boreholes (which will all eventually have to be re-drilled at an increasing number of meters).
Sellers and buyers are reminded that no sale can now be effected without them both attending a ZIMRA interview (they can nominate an individual to attend on their behalf).
When this is not possible a power of attorney must be obtained for a nominated individual to attend on their behalf. This is affecting the time and cost of effecting transfer. Many tenants are using the ineffectiveness of our current legal system, and are deliberately delaying sales in order to remain in occupation.
In addition many owners are being left with substantial ZESA and Council rates bills, by their tenants, which they have to pay in order to effect transfer.
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