Property demand breathes life into real estate sector

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HARARE – Despite the effects of Covid-19 ravaging all sectors of the economy, the real estate industry is set for a surge driven by an increase in property investments by health personnel in the long run, Rhuwa Property managing director, Bigman Zvavandanga has said.

The past months have been tough for the sector due to several challenges such as foreign currency shortages, inflationary pressures, poor utility supplies, waning disposable incomes and low demand, which the country has been battling since last year.

These have put the property business under pressure as there has been a decrease in occupancy levels and rental incomes.

Now with the coronavirus (Covid-19) pandemic, hopes of peaking towards year end seem to be shuttered.

However, although most players agree that the pandemic will pose a lot of threats to many businesses in the country, Mr Zvavandanga sees an opening of opportunities for the sector in the long run.

“More money coming into the health sector means increased property investments on our side by the health personnel, thereby increasing cash flow in the property sector,” he said.

Meanwhile, the national lockdown has put people’s movements and business operations to a halt, which according to junior valuer and estates manager at the City of Harare, Gashirayi Zvavandanga, in his article ‘Reflection on the Covid-19 pandemic and its effects on the Zimbabwean Property Market’ poses “ . . . a challenge to individuals and businesses in meeting their rental obligations across all sectors” thereby lowering the cash flow in the property business.

“The property market is dynamic and has several sub-markets, so investing in property during the time of the pandemic depends with the different activities happening in each different sector.

“For instance, investing in hotels and resorts at the moment could prove to yield no results.

“However, investing in industrial warehouses or residential properties could prove to be profitable.

“So generally, it all depends with the target market in which the investor wants to invest.

“But generally though, they say in recessionary periods, property always proves to be the investment of choice because of its unique attributes as an investment asset, one of which includes being less volatile as compared to the alternative investments,” said Mr Zvavandanga.

According to the estates manager, sectors such as tourism resorts, hotels, lodges, conference facilities, halls and stadiums have immensely been affected adversely by the restricted movement in all countries, resulting in sports and major headlined events either being postponed or cancelled.

“Yields on such properties have drastically dropped with almost zero activity in these sectors.

“Such sectors should start thinking of innovative ways that will mitigate negative impacts and start generating some activity,” he added.