HomeBusinessRent control no longer the answer - REIZ boss

Rent control no longer the answer – REIZ boss

RENT control for residential properties is no longer the answer to rent reductions says Real Estate Institute of Zimbabwe (REIZ) president Abraham Sadomba.

“If re

nt control is removed, you are most likely to see an increase in the supply of houses as some companies will find it attractive to build a housing scheme for their employees and others,” Sadomba said in his report to the association.

“An increased supply of houses to rent will eventually cause a reduction in rent. It must always be borne in mind that not everyone needs a house to own. A number of people will prefer to rent.”

There has been a tug of war between landlords and tenants on the regular and sometimes sudden rent increases.

Bulawayo-based tenants, riled by the regular rent increases, brought in the Affirmative Action Group (AAG) to try and solve the issue, much to the dismay of REIZ members who said the matter was economic and should not be handled by politicians.

Recommendations were then made that increases be done quarterly, something tenants rejected.

The tenants said rent should be increased once a year only, which landlords rejected.

Sadomba said renting was a viable proposition as long as there was an adequate supply.

He said there was no need for rent control for residential, industrial and commercial properties as there was adequate legislation in place to deal with any unfair or unjust rental demands.

“As an institute, our members are quite free to advise their clients and indeed members of the public of their right in the event that an agent makes rental proposals which are unacceptable,” Sadomba said.

“Our industry is generally geared to work with the monetary authorities in their quest to get inflation down. The issues surrounding complaints from industry and commerce have to be studied and addressed in a manner that will not affect the viability of the construction industry.”

Leading international property consultants Knight Frank meanwhile said the residential leasing market has seen substantial rental growth, above the rate of inflation, over the last two years as the availability of leasing stock had declined significantly.

In its report for the year ended December 31 Knight Frank said by contrast, the sales market had seen an increase in the number of properties on the market, fuelled in part by a migration of upper income groups to secure communal developments.

Houses have shot up from about $500 000 in upmarket suburbs in the 1990s to more than $1 billion today, while in the high density suburbs they have increased from about $10 000 to $150 million.

Due to hyperinflation, landlords with properties at the top end of the market were increasingly quoting rents in hard currency.

The tendency was, however, deemed illegal by Reserve Bank of Zimbabwe governor Gideon Gono when he took office in December last year. Sellers were also transacting at hard currency pegged prices with the conversion to local currency being made at the parallel market rate. Property market analysts say demand is currently strong for cluster houses, town houses and good quality garden flats as they generally have good security and access to amenities. – Staff Writer.

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