BY SHAME MAKOSHORI
A leading property market player has raised fears of a complete dislocation of the sector as big projects disappear, while fresh headwinds mount.
Underlying the uncertainty is a huge tenant exodus from high-earning real estate gems to set up warehousing and office space at their homes in order to cut costs in line with declining opportunities in the wake of lockdowns.
In its property market report for 2020, Integrated Properties (IP) extends its fears beyond the property market, casting doubts over the relevance of growth rates announced by Finance minister Mthuli Ncube in December, in the aftermath of the second wave of Covid-19.
It called upon government to review the forecasts to give markets a proper perspective.
The report places the property market among sectors worst affected by lockdowns in 2020, when tables turned against real estate owners with tenants dictating what to pay.
IP says there may be no respite in 2021, but adds that there could also be a few sub-sectors to look up to.
“The year 2021 began with a virulent second wave of Covid-19, amid a spike in infections and deaths,” said IP in the 14-page report.
“This left the authorities with no choice except to reintroduce lockdown restrictions for 30 days.
“With indications pointing to a further extension of the lockdown, the multimillion dollar question being asked by property owners, investors, tenants, lenders, tax collectors is: what next for the real estate sector as the cloud of uncertainty reminiscent of the period April to August 2020 hovers over the industry?” the paper noted.
It said excerpt for a few major projects, big infrastructure programmes had been halted, with players shifting to housing development, the only front to possibly see the construction industry through 2021.
So many factors have shifted government’s public spending options in the past year.
But the pandemic still tops the list of the drivers of this shift.
Massive amounts of money were initially deployed towards importing and manufacturing personal protective equipment before focus moved towards the importation of vaccines.
Government has budgeted an initial US$100 million for this, but this could mean non-health projects may have to suffer in order to protect people.
Private sector-funded mega projects had already disappeared due to the economic crisis.
“With no major noticeable construction projects beyond the dualisation, upgrading and tolling of the Harare to Beitbridge highway at a cost of US$2,7 billion, the construction of the New Parliament building in Mt Hampden and the expansion of the Robert Gabriel Mugabe International Airport in the capital, it became quite apparent that the development of houses in most, if not all, cities, towns and growth points drove volumes during the review period,” IP said.