The politics behind the exorbitant and bourgeois property prices in Zimbabwe Reserve Bank of Zimbabwe (RBZ)

Marshall Rufura Ndlela, Opinion

Property price entails the valuations of the worthiness of land, buildings and companies at large. Property price is regarded as the amount that the asset or property is worth with respect to the surrounding similar assets or properties. It is the price a seller is willing to let her, or his asset go for in an open market.

Zimbabwean asset prices are affected mostly by demand for housing from the domestic market and the foreign (diaspora) market. In 2004, the Reserve Bank of Zimbabwe rolled out a progressive initiative called Homelink, with a goal of enabling the diasporans to access land, houses and assets. The Homelink initiative could lead to many Zimbabweans in the Diaspora owning land and properties.

Looking at the Zimbabwean situation, property prices are mainly affected by the unstable local currency and the role of municipalities. Municipalities play a crucial role in influencing the prices of land and property. Historically, the struggle of African liberation was mainly based on land redistribution and compensation. The Lancaster House agreement of 1979 was premised on land reform.

 

Land was to be transferred back to the majority who are Africans, with respect to economics. Land is a God-given resource just like air, with a Godly price of zero. The price of land should be zero to any African citizen, to a Zimbabwean. The colonial forces pushed the native Zimbabweans or Africans to mountains, tsetse fly infested areas and infertile land zones.

As a sphere of government, the municipality should allocate land as a resource to the natives of the city. Unfortunately, we have witnessed the opposite. The current municipality political leaders are part of the bourgeois land dealers and land barons. The prices of land in Zimbabwe are unreasonable, dodgy and capitalist. As much as Zimbabwe is a mixed economy, the municipality plays a crucial role in land allocation (stands).

Politically, the MDC or CCC has overseen the urban municipalities. They have let market forces and unreasonable speculation determine the prices of assets and properties, leading to market failure. The inefficiency resulted in the creation of land barons, corrupt political leaders, speculative tendencies and extortion.

It is quite evident that the Zimbabwean land price per square metre is unclear and unstable due to lack of the municipality directive on land prices.

There is no clear policy on urban, near urban and rural land acquisition that falls under a responsible municipality. The main cities of Zimbabwe fall under the opposition political forces, who do not have a clear political directive on land allocation to the ever-growing population of the metropolitan municipalities.

The prices of stands or land portions in the suburbs of the main metropolitan areas are indeed democratic ranging from US$12 to US$50 per square metre. The undemocratic part of it is how the land is acquired. An ordinary metropolitan Zimbabwean will have to apply for a stand or land and wait for the municipality to allocate. There is no clear market for land sale or auction, maybe in the office of the mayor. We have witnessed ordinary citizens applying for land for more than 20 years with no allocation or response.

Land barons masquerading as land developers are running cities. The process of land allocation is probable in the office of the mayor and his fellow elected cabals. This practice has distanced the property valuation from the expected market practices. It is indeed a corrupt, bogus and speculative system that has resulted in escalated prices that are far above the market prices or the prices of similar properties in Sadc.

South Africa property prices are mainly synchronised to interest rates, exchange rate, demand and affluence of the area. Looking at the property price in an affluent area of Pretoria in comparison to Harare and Bulawayo, it is surprising that the price of a similar house in Zimbabwe is three times the price of a similar house in South Africa. The speculative fertile ground has indeed increased the pessimistic attitude of potential property investors who are compelled to favour South Africa over Zimbabwe.

Property sales contribute positively to the Gross Domestic Product of a country in the form of retirement homes and general tourism investments. Zimbabwe is a prime tourist destination, and expensive properties discourage investors. Such property price disorder results in overpricing of land or stand prices, accommodation prices and old properties. Apart from the political disorder on land pricing, land barons and speculators breed corruption, double land sellers, unscrupulous land agencies and corrupt activities as seen by the current Harare land double sale and purchase.

Using South Africa as a benchmark, Zimbabwe needs to develop an efficient property regulatory body that shall have a legislative mandate to register, regulate and penalise land developers, land or property agencies, and determine a clear policy on land acquisition.

The current Zimbabwean property market is left prone to MDC/CCC political mismanagement and corruption. A recent news article indicated that Bulawayo Mayor Councillor Solomon Mguni sold a stand to himself in local currency with flexible terms amounting to less than US$1 per acre a month.

Mayor Solomon Mguni

If democracy could be extended to the citizens, then every citizen of a metropolis could have a property.

Marshall Ndlela is a Zimbabwean based in South Africa.

He is a holder of a Masters Degree in Finance and Accounting from the University of Chichester, England. He can be contacted on [email protected].

You Might Also Like

Comments