Property firm, Cardinal Corporation, says the country’s real estate is now uncompetitive and risks losing out on new capital as investors look to developments in neighbouring countries that are more lucrative.
Executive chairman Jeremy Brooke, cited the macro-economic environment that poses a threat to the ease of doing business in the real estate sector.
The tax regime for instance, Brooke revealed, was too high compared to neighbouring South Africa, which made the end-product more expensive and unaffordable for the ordinary consumer.
After sale of a property, Government takes at least 32 percent of the total revenue in taxes while the developer gets only 1 percent of that as profit.
At current levels, one needs to earn at least $66 000 a month to service a mortgage for a three-bedroomed house in a cluster development and still live a comfortable life.
“A middle-income earner is not anywhere near this,” said Brooke at the Zimreal Property Investment Forum held in Harare on Wednesday.
“The market is uncompetitive due to too many regulations and we will not sell. We have chased away capital and skills in the past three decades.
“We should tweak the regulations to make the business more competitive again. Right now we are not doing enough to attract capital back into the sector because we are governed by a lot of rules and regulations,” he said.
Brooke said a vibrant market allows the participation of the middle-income earners, something that cannot be said of the Zimbabwe economy.
Among other challenges cited is, time expended from land acquisition to transfer of title, for instance, for a three-bedroomed house in Zimbabwe between two years to three and a half years.
This, Brooke said, which makes the cost of taxes four times more than what is paid by regional peers such as South Africa.
The real estate sector has also been affected by the macro-economic challenges affecting the economy especially the fiscal and monetary reforms that have been introduced.
In October last year, Government announced reforms, including separation of nostro and domestic currency accounts, 2 percent intermediated tax, exchange rate liberalisation and the recent ban of the multi-currency regime.
Mashonaland Holdings managing director Gibson Mapfidza, said property valuations were still ongoing factoring in the latest developments in currency reforms.
In some instances, the properties were still priced in United States dollar terms but transacting using local currency prompting some sellers to hold back as they observe the market trends and developments.