Zimbabwe's Real Estate Conundrum: Unpacking the Supply and Demand Dynamics

Admin May 22, 2024

Zimbabwe's real estate market is experiencing a surge in prices due to a supply-and-demand imbalance. The market is expected to reach $69.34 billion by 2025 but will witness a negative annual growth rate of -3.96% from 2024–2028, resulting in a market volume of $58.99 billion, according to STATISTA.

Supply and Demand Imbalance:

Supply: Economic challenges, including hyperinflation and currency fluctuations, have led to a decline in new construction projects, resulting in a limited number of properties available for sale.
Demand:The demand for properties has increased significantly due to population growth, urbanization, and investment.

Zimbabwe's housing shortage stems from:

Rapid urbanization and population growth
Economic instability and lack of investment in construction
Limited access to mortgage financing
Displacement from Operation Restore Order (2005)
Outdated building standards
Land management and allocation challenges

This shortage leads to:

Overcrowding and poor living conditions
Growth of informal settlements

Statistical Insights:

Zimbabwe's population grew from 12.9 million in 2012 to 15.1 million in 2022, representing a 17% increase.
Urban population is projected to reach 6.3 million by 2025, up from 4.3 million in 2012.
Inflation rate has been volatile, peaking at 800% in 2008 and currently standing at around 200%.
70% of properties sold in 2022 were purchased by investors, highlighting the demand for real estate as a safe-haven asset.

To address the housing crisis, it's crucial to incentivize new construction projects and increase affordable housing options. Understanding the underlying dynamics of Zimbabwe's real estate market is essential to navigating the challenges and opportunities ahead.

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