• Policy Inconsistency: Zimbabwe's property sector is hindered by frequent policy changes, deterring long-term investments and hindering sustainable growth
• Fiscal Considerations: Targeted fiscal measures, such as tax breaks and concessions, can incentivize developers to…
• Land Allocation: A centralized land allocation system, prioritizing partnerships with established developers for...

Harare-  Zimbabwe's Real Estate market is poised for significant growth, with a projected value of $124.80 billion by 2025. The Residential Real Estate segment will dominate the market, accounting for $85.35 billion in 2025. This segment is expected to grow at a 3.96% annual rate from 2025 to 2029, reaching $145.80 billion by 2029. 

It is  experiencing significant growth, driven by demand for affordable housing and urbanisation. This trend is expected to continue, with customers seeking affordable and decent homes. The growing trend towards urbanisation has led to an increased demand for housing in urban areas, particularly in major cities such as Harare and Bulawayo.

However, the market is characterised by rising property prices beyond the reach of many, particularly in urban areas due to increased demand, limited supply, and inflationary pressures. As a result, real estate has become a lucrative investment option for many individuals and businesses. There has been a surge in the construction of commercial properties, such as office buildings and shopping malls, to cater to the growing needs of businesses and consumers.

Mash Holdings, a premier property investment and development firm specializing in comprehensive real estate solutions across commercial, residential, and industrial sectors, has identified three critical factors influencing the property market in Zimbabwe. These factors, policy inconsistency, fiscal considerations, and land allocation are not only shaping the local real estate landscape but also offer valuable insights when compared to trends in other African nations and China.

Below, we explore each factor in detail, supported by case studies and examples from various countries.

Policy inconsistency remains a significant impediment to sustainable growth in the property sector. According to Kudakwashe Musundire, CEO of Mash Holdings, erratic policy shifts create an unstable environment that discourages long-term capital investment. For property developers, consistent and predictable policies are essential for strategic planning and successful project execution. Musundire states, “Policy inconsistency is bad for property investors as those continuous changes are detrimental to long-term capital investment.” He emphasizes that without consistency, it becomes challenging for investors to plan effectively, highlighting the need for clearly defined policies that demonstrate the potential for growth.

Zimbabwe is at the helm of policy inconsistency. This can be traced back to its foreign policy in the 1990s, which ultimately led to the demise of the Zimbabwe dollar. In the early 2000s, inconsistencies regarding land policy cost the country dearly, shifting it from being the breadbasket to a begging basket.

Under currency, a lot of inconsistencies have nbeen made especially with regards to currency of use and policies to effect. This has seen the country having more than 3 currencies in nearly a decade putting the economy in shambles.

However, this is not only a Zimbabwean problem. In Nigeria, the biggest economy in Africa, frequent changes in land use policies and taxation regimes have disrupted the property market. The Lagos State government’s sudden introduction of a new land use charge in 2018 led to widespread protests and a slowdown in real estate investments. The policy was later revised, but the uncertainty caused significant damage to investor confidence. In Kenya, inconsistent policies around affordable housing initiatives under the Big Four Agenda have created challenges for developers. Delays in implementing promised incentives, such as tax breaks for affordable housing projects, have slowed progress and deterred private sector participation.

In contrast, China’s property sector has benefited from relatively stable government policies, particularly in Special Economic Zones (SEZs) and urban development areas. The Shenzhen SEZ has maintained consistent policies since its establishment in 1980, attracting massive investments and transforming the city into a global economic hub.

Lesson for Zimbabwe

Zimbabwe can learn from China’s approach by establishing clear, long-term policies that provide a stable environment for investors. This could include creating dedicated economic zones with consistent regulatory frameworks to attract both local and foreign investment.

Fiscal Considerations

The second critical factor is fiscal considerations, which play a pivotal role in shaping the property sector’s trajectory. Mash Holdings emphasizes the importance of targeted fiscal measures, such as tax breaks and concessions for developers delivering affordable housing solutions. These incentives can catalyse meaningful development, particularly in addressing the growing demand for housing in urban and peri-urban areas. Musundire notes the necessity for fiscal measures to support property developers, stating that “specific policies that support property developers, such as tax breaks and concessions, need to be offered for meaningful development to occur.”

In South Africa, the government introduced the Housing Development Agency (HDA) in 2009 through an Act passed in 2008 and provided tax incentives for developers involved in affordable housing projects. The agency works with various stakeholders, including government departments, municipalities, and private developers, to facilitate the planning and implementation of housing projects. It further  provides technical support and capacity-building initiatives to municipalities and other local authorities to enhance their ability to deliver housing effectively.

Of paramount importance is The Reconstruction and Development Programme (RDP), now known as Breaking New Ground (BNG), introduced in 1994 by Nelson Mandela. Since then, more than 3.5-million BNG houses have been built for recipients. Hence, these measures have encouraged private sector participation and helped deliver over 3 million housing units since 1994. Rwanda’s Kigali City Master Plan includes fiscal incentives such as reduced property taxes and import duty exemptions for construction materials used in affordable housing projects. This approach has attracted significant investment and accelerated urban development. Similarly, in China, the government offers tax rebates and subsidies to developers involved in affordable housing projects. The "Economically Applicable Housing" program provides land at reduced costs and tax incentives, resulting in the construction of millions of affordable housing units.

Lesson for Zimbabwe

Zimbabwe could adopt similar fiscal measures, such as tax breaks for developers of affordable housing and reduced import duties on construction materials. These incentives would lower development costs and make housing more accessible to low- and middle-income earners.

Land Allocation

Lastly, land allocation remains a critical issue, as land is a finite resource with significant implications for property development. Mash Holdings advocates for a collaborative approach between the government and established property developers to streamline land allocation for social and affordable housing projects. Musundire points out that “getting land is difficult because land is a finite resource,” stressing the need for government support in land allocation processes.

The practice of selling land primarily to land merchants, who subsequently sell it to land developers at inflated prices, significantly impacts housing affordability. This intermediary system drives up land costs, as land merchants often mark up prices to maximize their profits before passing the expenses onto developers. Consequently, developers face increased costs for acquiring land, which in turn leads to higher prices for housing units. As a result, the final product becomes less accessible to low- and middle-income buyers, exacerbating the housing crisis and making it difficult for many individuals and families to secure affordable housing. This cycle not only limits homeownership opportunities but also stifles broader economic development by restricting access to essential housing for a growing population.

Source: www.propertybook.co.zw, Equity Axis

In Ghana, the Land Administration Project (LAP) aimed to streamline land allocation and registration processes. However, inefficiencies and bureaucratic delays have hindered progress, leading to disputes and increased costs for developers. Conversely, in Tanzania, the government has partnered with private developers to allocate land for affordable housing projects under the Tanzania Housing Project (THP). This collaboration has reduced costs and accelerated the delivery of housing units. China’s centralized land management system allows the government to allocate land strategically for large-scale development projects. The government leases land to developers at subsidised rates for affordable housing projects, ensuring that land costs do not inflate housing prices.

Lesson for Zimbabwe

Zimbabwe could benefit from adopting a centralized land allocation system, where the government partners directly with developers to allocate land for targeted projects. This would reduce costs, eliminate intermediaries, and ensure that land is used efficiently for social and affordable housing.

The experiences of other African countries and China highlight the importance of policy stability, fiscal incentives, and efficient land allocation in driving property sector growth. For instance, Rwanda’s streamlined land registration process and South Africa’s affordable housing incentives have demonstrated the positive impact of well-structured policies. Meanwhile, China’s centralized approach to land management and urbanisation offers a blueprint for large-scale development.

As Zimbabwe’s property sector looks toward 2025, property developers anticipate a more conducive environment for growth, driven by policy continuity, fiscal support, and improved land allocation mechanisms. Mash Holdings calls for a collaborative effort between the government and private sector to address these challenges and unlock the sector’s full potential. By learning from global best practices and adapting them to the local context, Zimbabwe can position itself as a competitive player in the regional and global real estate market and contribute to addressing the housing gap of over 1 million houses.

Recommendations for Zimbabwe

To effectively move forward, Zimbabwe should focus on establishing a clear, long-term policy framework for the property sector, ensuring minimal changes to foster investor confidence. Introducing tax breaks, subsidies, and reduced import duties for developers involved in affordable housing projects would be beneficial. Implementing a centralized land allocation system that prioritizes partnerships with established developers for social and affordable housing initiatives will also be crucial.

In conclusion, the future of the property sector in Zimbabwe hinges on addressing these three critical areas. With the right policies and partnerships, the country can overcome current challenges and achieve sustainable growth, ensuring that the property market remains a safe haven for investors and a driver of economic development.

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