Mashonaland Holdings Limited (Masholds) says housing developers have been affected by stagnant consumer incomes during a period of high costs for housing.
With prolonged exchange rate volatility, low wages, diminishing formal jobs, declining social spending by government among other hurdles, Zimbabwe’s consumers are struggling to afford housing.
The national housing backlog stands at about two million, partly highlighting the effects of economic turbulence on both developers and home seekers.
Government’s call for public private partnerships in housing development has increased in recent years, but Masholds says tapering demands has also been experienced across African markets.
“Recent trends in Zimbabwe and Africa have shown that housing remains unaffordable to the majority of the population,” Masholds said in its 2024 annual report released recently.
“Incomes have not been growing in tandem with the cost of housing. Property developers have to contend with the rising costs of delivering residential stock, which include high interest rates, high land servicing and compliance costs.”
Masholds said with limited stock coming through from local authorities, the burden of housing delivery was placed upon the shoulders of private developers.
“We are exploring private public partnerships with government and local authorities in an effort to circumvent high land costs and ultimately deliver low-cost housing stock for low-income earners,” the firm said.
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Masholds acknowledged the effects of volatility in Zimbabwe and on the global stage, which have impacted its operations.
“Economic pressures, economic informalisation, currency volatility, taxation challenges, and geopolitical tensions influence our adaptability and responses,” Masholds said.
“We proactively address current trends such as supply chain disruptions or the cost of living crisis, recognising their impact on our business and consumers.”
This pressure to deliver housing also leaves property developers unable to provide small to medium enterprises (SME) with workspaces.
“One of the primary issues affecting growth of small to medium entrepreneurs in Africa is unavailability of affordable, ‘SME-Centric’ and decent trading space,” Masholds said.
“Consequentially, traders resort to setting up on the peripheries of the central business districts or simply resort to pavement trading, where they have running battles with municipal police.”
The developer noted it was addressing this challenge by remodelling some of its existing properties to fit the size, format, and use for SMEs.
“Through our sustainability initiatives, we invest in projects that address local needs and priorities, focusing on education, empowerment of the rural girl child, skills development, and women’s empowerment,” Masholds said.
“By collaborating with local stakeholders and grassroots organisations, we foster meaningful partnerships that create shared value and contribute to the socioeconomic development of Zimbabwean communities.”
Masholds bolstered its investment properties portfolio by US$10,9 million last year, raising total valuation to US$91,6 million.
The group’s major property developments include Pomona Commercial Centre Development Project, Milton Park Day Hospital, and Chiyedza House SME Centre.
The group continues to pursue its vision and strategy of growing shareholder value by owning and managing strategic real estate assets and spaces in a way that transforms the lives of stakeholders and communities it serves.
“To achieve this vision, the group set out a roadmap to diversify and increase its property investments,” Masholds said.
“The portfolio diversification strategy is aimed at reducing portfolio concentration and ensuring steady returns, while the portfolio growth strategy is aimed at improving the group’s offering to a changing customer preference.”
