Housing boom feeds into economy

Key forecasts project that the economy will grow by 4,5 percent, pushed by anticipated growth in key sectors of the economy.

For the Zimbabwe Stock Exchange (ZSE) listed property and construction oriented stocks, 2018 could be a promising year, thanks to various Government projects, private enterprises and the general economic outlook.

Old Mutual, Masimba, Proplastics, ZPI, Willdale, Lafarge, PPC and First Mutual Properties are poised for a good financial year with some already angling themselves to cash in on the anticipated boom in the sector.

For the commercial property sector comprising of retail and office space, as well as industrial property, growth — which is currently subdued —CHIDHAFU DHUNDA is underpinned on the general performance of the economy.

While there has been a general increase in voids in the central business district as companies opt for cheaper premises elsewhere, the anticipated growth in other key sectors of the economy such as agriculture, mining, tourism and manufacturing is expected to boost construction.

Government is working on residential and institutional property development projects. Worth mentioning is the construction of student and staff accommodation facilities in tertiary institutions as part of efforts to ease accommodation problems following the ballooning of student population.

The programme also targets to narrow other infrastructure deficiencies such as sporting and recreational facilities in tertiary institutions.

The country also expects major construction projects for commercial purposes, with ZPI working on a shopping mall in Victoria Falls while FMLP is angling for supermarket developments in Karoi, among other projects.

Diversified group, Old Mutual, is working on its small to medium enterprises mall in Harare’s central business district whose completion is expected this year. This analysts say, will boost the sector.

Additionally, there has been an increase in residential property developments pushed by the increased urban population.

The national housing backlog currently stands at 1,2 million units.

“The residential developments take centre stage largely due to the demand driven by the 1,2 million national housing backlog.

“On taking a look at all towns and cities around the country, significant housing developments are taking place,” said Real Estate Institute of Zimbabwe (REIZ) president Mr Mike Juru via email.

Brick making firm, Willdale, is already angling for the housing boom that is currently being experienced in the country.

“We are encouraged by the optimism in the construction industry that is driven by the hunger for housing, institutional and infrastructure development which we anticipate to continue in the near future. Demand for bricks for these projects will keep our order book full,” said Willdale chairman Mr Alex Jongwe.

Construction and associated industries firm, Masimba Holdings’ latest financials for the half year to June 2017 showed a 35 percent revenue jump to $11 million.

In the period, Masimba was sitting on a $38,4 million order book.

Mr Juru added that the launch of a cement making plant last year shows there is going to be major investments in the real estate and associated sectors.

Regional cement maker, PPC, which launched a new plant in March last year, said volumes for the period to June 2017 reached record highs in Zimbabwe on the back of increased activity in the construction sector, which is expected to continue this year.

Dam and road rehabilitation projects lined up in the year are expected to further increase activity in the sector.