Zimbabwe Property Market: A Surprising Source of Investment

Zimbabwe’s property market might defy expectations, according to commercial property professional Kura Chihota. In a recent interview on Moneyweb’s 100th episode of The Property Pod, Chihota offered insights into this often-overlooked African market.

Chihota highlights a key characteristic of the Zimbabwean property landscape: the lack of a robust mortgage market. With less than 5,000 registered mortgages in the entire country, homeownership often follows a different path.

Many Zimbabweans, says Chihota, opt to buy plots of land and gradually build on them over time. This “incremental” approach reflects the limitations of traditional financial instruments.

“So at a household level, if you don’t already own the house, you probably bought a stand and you’re adding to that stand over time incrementally, because we don’t have active mortgage markets.

“We’ve got less than 5 000 registered mortgages active in the country, so people are using it to store value because you can’t put your money and expect a return in US dollars from a pension fund or any other financial product. So it’s locals investing locally.”

However, this doesn’t translate to a stagnant market. Chihota emphasizes the property market’s activity, driven by locals seeking to preserve the value of their investments.

Unlike some financial products, property offers a tangible asset in a context of economic uncertainty.

Zimbabweans, both within the country and in the diaspora, are turning to real estate as a way to hedge against inflation and secure their financial futures.

The investment focus, however, leans towards specific areas. Chihota identifies high-yield opportunities in developments similar to South African townships, particularly backroom dwellings and inner-city projects.

These areas offer returns of around 12-14 percent, making them attractive propositions for investors.

Chihota’s insights paint a contrasting picture of Zimbabwe’s property market. While traditional mortgage-backed ownership remains limited, alternative strategies are driving activity.

Locals and Zimbabweans abroad are utilizing property as a store of value, with specific segments like high-density housing developments attracting investment due to their strong yields. This unexpected dynamism suggests a property market with unique characteristics and potential for growth.-ebusinessweekly