THE private sector is stepping up to provide housing in Zimbabwe as the country continues to experience a serious accommodation shortage due to get a combination of factors, which include economic, policy, income, migration and demographic issues.
In Harare, West Property Company, established in 2007, has been at the forefront of housing development. Its business model is the role of master planner, financier and developer of sustainable residential and commercial properties in the greater Harare area.
West Property has already developed and is working on some housing estates such as Gunhill Rise, Homeland 236 and Pokugara, among others. These are developments in the suburban areas.
There are many other private property developers who are also building residential units in high density and medium density suburbs for the population which is largely struggling to get houses and decent accommodation.
Apart from the private, government, private-public partnerships and cooperatives are deliver housing through various funding models.
The housing landscape in Zimbabwe is buffeted by a number of challenges characterised by a severely constrained supply side of serviced stands and housing units.
The challenges to housing delivery are multi-dimensional, according to the Infrastructure Development Bank of Zimbabwe.
Major challenges in housing sector delivery include:
–Slow land delivery by local authorities (for new projects);
–Limited institutional capacity at all levels of housing development;
–Lack of affordable housing finance- interest rates, down payments, etc;
–High unemployment and low salary levels (limited offtake capacity);
–Undeveloped land too expensive (affects overall project cost); and
–Cost of housing construction too high.
As a result of these issues, affordability remains a major deterrent to home ownership in Zimbabwe. Millions of Zimbabweans do not own homes.
They are renting, while some live in shacks. A lot of informal settlements have in recent years be mushrooming around big cities, especially Harare.
Government has in recent years and of late been demolishing irregular houses.
Addressing the housing challenge requires balancing the short-term profit motive with sustainability and the social objective of reducing the mushrooming slums and homelessness.
Funding is one of the biggest problem preventing home ownership for the majority.
Housing can be financed through a number of formal, institutional or informal sources.
Institutional sources include direct government funding, commercial banks, mortgage houses (building societies), pension funds, private sector real estate developers such as West Property and state housing corporations.
Informal sources mainly take the form of cooperative societies.
Public funding for direct investment in public housing is very limited, but public sector agencies can play a key role in providing affordable land for development by private sector players.
Available funding options include:
Public Funding – budgetary allocations towards housing developments (very limited);
(ii) Joint Ventures on housing project developments (PPP or private sector players only);
(iii) Capital market option – issuance of long term securities in order to raise capital for investment in housing;
Property Unit Trusts – this funding mechanism entails mobilising funds from different small scale investors to invest in housing properties and projects and;
Co-operatives – these are a result of limited provision of affordable institutional finance in housing development for low income groups.
— STAFF WRITER
