Zimbabwe House prices decrease as many people default on loan repayments

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THE increase in the number of properties on the market mainly due to auctions as owners default on loan repayments has forced prices of houses to slightly go down although officials could not readily reveal by what percentage.

Hundreds of property owners throughout the country are losing their houses as a result of defaulting on bank loan repayments amid revelations that there is an increase in properties being auctioned by the Deputy Sheriff’s office.

Estate Agents Council chairman Mr Oswald Nyakunika said property, however, remains the most viable investment vehicle in the country despite the drop in prices as people have lost confidence in the banking sector.

“There is such a shortage of cash or liquidity and mortgage loans such that what is available as regards to mortgages is a drop in the ocean. Many sales are now cash or by deed of sale (instalments).  This has pushed down asking prices.

Also the number of loan defaulters has increased resulting in a huge flood of secured properties onto the market. This has also pushed down prices,” said Mr Nyakunika.

The mortgaging sector in the country is facing challenges that include lack of long-term mortgage finance and limited housing stock.

“There are no savings. In fact most banks only offer current accounts. Most people don’t invest long-term in the banks for fear of what happened with the Zimbabwean dollar. The share market has almost disappeared.

“When you take all this into account the best place to put your money is property. Insurance and pensions are suspects. When you want them to pay they can’t pay. The best pension to date is rentals from property,” Mr Nyakunika said.

Millions of people lost their life savings and pensions when the country adopted foreign currencies in 2009 to replace a collapsed local unit.

Meanwhile, a Real Estate Riches Summit and Expo will be held Harare on Friday and Saturday.

The conference will be at Crown Plaza on Friday while the exhibition would be taking place the same day and the following day (Saturday) at Harare Gardens. The summit is expected to attract property investors, leading commercial banks and building societies, land or property developers, urban councils, conveyancers, housing co-operatives and trusts, Ministry of Local Government, auctioneers and real estate agents, contractors and building material suppliers as well as service providers.

The main speakers would be Mr Psychology Chiwanga, the director of Urban Planning of the City of Harare, Mr Ken Chitando, a career banker with experience in corporate and retail banking, projects and structured finances as well as management consulting and Mr Gary Muza Mushambavanhu an avid property investor in Southern Africa.

Source: The Zimbabwe Mail

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