Property Sector Set to Boom
Property sector poised for boom
The property sector is set to boom as building societies and insurance companies are responding to the demand for housing through different initiatives in the country.The building societies and insurance companies have come up with housing schemes that are tailor-made to suit the different economic classes of the Zimbabwean society with terms that make it easier to own a home especially at a time the economy is grappling with liquidity challenges.
Schemes range from those that extend loans in order to finance construction of a house to mortgages for purchasing completed housing units.
FBC Building Society is embarking on a 72 cluster medium-density housing project in Waterfalls, Harare, that is expected to be complete by the end of the year.
The Masotsha Ndhlovu housing scheme, whose construction started last month, will see potential home owners forking out US$130 000 cash for a house while there are also terms for those that cannot afford cash.
The terms will include a payment of US$36 500 initial deposit while the balance will be payable in a 10-year mortgage bond with clients expected to pay monthly instalments of US$1 800 for the next 10 years.
The scheme is open to anyone including those that are not FBC clients on condition that they pay the stipulated deposit. An official from the building society said in the event that one fails to continue with the scheme, “the institution will repossess the house, calculate how much the client had paid in instalments before charging interests and a penalty while the balance will be paid back to the client”.
The initial phase of 18 fully completed housing units will have three bedrooms (main en-suite), an open plan lounge and kitchen, single lock-up garage, private garden, landscaping, security wall with electric fence and gate, intercom and guard house. FBC is also undertaking an almost similar project in Greendale
Another financial institution, CBZ Bank, through its mortgage and finance department has also unveiled a housing facility that is, however, only open to the bank’s account holders.
The scheme is only for residential stands and beneficiaries would be expected to build their own houses. According to the bank, a credit facility is extended by the bank for purposes of acquiring a stand that is a registered bond payable over 10 years and in the event that one fails to continue with the scheme, the bank will calculate the total amount contributed by the client then charge interest plus penalty and pay out the remainder.
The stands on sale are low-density stands in Gweru located along the Shurugwi highway averaging between 1 800 square metres and 3 500 square metres while the Mt Pleasant Heights scheme in Harare is yet to go onto the market.
Cash prices are pegged at between US$21 000 and US$34 500 for the smallest and largest Gweru stands respectively. For the smallest, a deposit of US$9 000 is required while thereafter one will have to pay US$300 in monthly instalments while for the largest stands customers will have to pay US$16 000 as deposit, while about US$700 would be due every month.
For the 10-year balance payment period there is an interest rate of 18,5 percent per annum that is charged. Fidelity Life Assurance Company is also developing its South View Park high-density project located along the Harare-Masvingo highway.
The scheme is open to anyone as long as they pay the required deposit of US$2 500. An environmental impact assessment is being carried out on the site as permission has already been granted by the local authority while prospective buyers are already free to approach the company.
Fidelity will provide all the basic infrastructural services on the construction site which includes roads, sewer system and provision of water while customers will be expected to develop the stands on their own.
The balance is expected to be paid over five years or 10 years. For the five-year payment period, customers will be required to pay monthly instalments of US$89, while for the 10-year scheme customers will be required to pay US$143 per month.
According to a Bard Real Estate property market report, the country continues to experience a huge demand for serviced residential stands in most towns, while the lack of key infrastructure has hindered the supply side of new stands, a recent property market report has revealed.
The report, which was released last year, noted that the lack of infrastructure such as good road networks, consistent water and electricity supply have contributed to an increase in the number of properties, especially in Harare’s low-density areas that cannot be let or sold.
The report pegs the average prices for serviced high-, medium- and low-density land in Harare at US$25, US$18 and US$15 per square metre, while in Bulawayo they average US$12, US$10 and US$6 respectively.
Completed housing units in the two major cities were also pegged at an average of US$30 000 for the high-density, US$80 000 low-density and US$150 000 for Harare while in Bulawayo prices averaged US$12 000, US$50 000 and US$120 000 for the high-, medium- and low-density units respectively.