LAND and buildings form a basic requirement for all human activity, hence the need for property investment in the economy.
Historically, this investment has managed to retain its real value in the long-term. Apart from that, there is the assurance that the property owner has a greater proportion of control over the performance of the investment.
On the other hand, any worthwhile property requires a sizeable investment which in effect, concentrates the risk instead of spreading it. It also takes a while to dispose of this type of investment since property is not as liquid as money or equities.
One should also not rule out the possibility of voids occurring within property investments, especially in the midst of economic instability.
Property analysts this week said activity on the property market can be likened to a see-saw as evidenced by how it flourished during the third quarter of last year due to speculation and the money “burning” phenomenon.
Prices of properties are said to have declined slightly since January.
“Demand was high last year as individuals were investing in houses for speculative purposes until their actions were put to an end by monetary authorities’ measures of dollarising, controlling RTG’s and the stock market,” Real-Homes managing director Micheal Russell told Businessdigest.
Despite the economy being dollarised, exorbitant prices are still being quoted by estate agents with some houses in the low density being quoted above US$200 000. Properties in the low density are fetching between US$100 00 and US$40000.
Over the past three years, confusion has arisen as to who exactly determines property prices since real estate agents now quote amounts which they regard to be competitive with other agents without the aid of valuers.
By definition, real estate agents solely sell or lease properties on behalf of others. The Valuers Act ensures that people qualified to value property do so and not estate agents desiring to make a profit.
There seems to be a halt in the construction industry owing to the cash squeeze that has hit hard on companies and individuals alike. The economic slowdown and the shortage of foreign currency has impacted on the construction of high rise buildings.
Joina Centre in Harare which is hard to miss on the skyline has been under construction since 1999.
Meanwhile the lowering of interest rates is likely to increase the demand for property and consequently give the property market a much-needed boost.
Experts have predicted the recovery of the property market to take place in the latter half of 2009. For those who want to take advantage of the upturn, it is essential to be prepared.
BY PAUL NYAKAZEYA