Ready to Buy? 5 Essential Steps Before Getting Your First Home in Zimbabwe

Investing in your own home in Zimbabwe is one of the most significant and rewarding decisions you can make. It's not just about acquiring property; it's about securing your future and building a tangible asset that can appreciate over time. Instead of rent benefiting a landlord, your payments contribute directly to your own wealth. Property ownership in Zimbabwe offers a long-term investment that can be financed, eventually becoming a fully paid-for asset with enhanced value.

If a solo purchase isn't feasible, consider a joint ownership with a spouse, partner, or trusted family member. However, remember that property is a long-term asset, and selling quickly if the relationship sours can be challenging.

Here are five crucial, structured steps aspiring homeowners in Zimbabwe should take:

1. Secure a Stable Job and Consistent Income

• Employment History: Lenders in Zimbabwe typically require a track record of at least three months in a steady job.

Proof of Income:

• Salaried Individuals: Provide recent payslips.
• Self-Employed (Freelancers, Entrepreneurs): This may be more challenging but possible with:
• • • Verifiable proof of income.
    • Consistent bank records showing regular payments.
    • A detailed statement of income and expenses.
    • Bank statements must clearly reflect your income.

2. Establish a Good Credit Record and Assess Affordability

Affordability Check: Your income after deductions and living expenses must demonstrate your capacity to comfortably meet home loan repayments.

Building Credit History:

• Utilise short-term credit facilities (e.g., store accounts, small personal loans).
• Ensure consistent and timely payments over several months to build a positive credit history.

3. Obtain Mortgage Loan Pre-Approval

• Pre-Qualification is Key: It is highly advisable to get an affordability check and home loan pre-qualification before you start property hunting.
• Online Calculators: Zimbabwean banks and mortgage originators often provide online tools for initial affordability assessments.

Benefit: Knowing your budget upfront allows you to:

• Target properties within your financial reach.
• Streamline your search process.
• Present a stronger offer to sellers, knowing your finance is largely secured.

Engage a Professional: Once pre-qualified, contact a reputable real estate agent, like Seeff Zimbabwe, to assist with property identification and the formal home finance application.

4. Prepare Funds for Deposit and Associated Costs

Beyond the Loan: While 100% home loans are sometimes available for first-time buyers, various upfront transaction costs are typically the buyer's responsibility.

Required Funds: These usually include:

• Deposit: A percentage of the purchase price, often required by banks (e.g., some banks require a minimum 25% deposit, while others may offer up to 90% loan-to-value).
• Transfer Duty: Payable to ZIMRA upon transfer of property ownership. This is often a sliding scale, e.g., 4% of the property value (standard rate).
• Conveyancing Fees (Transfer Costs): Legal fees paid to the conveyancer for handling the property transfer. These are tariff-based by the Law Society of Zimbabwe, often around 3% of the purchase price or value.
• Bond Registration Costs: Fees for registering the mortgage bond with the Deeds Office. These can be around 4% of the bond value.
• Valuation Fees: Charged by the bank for valuing the property (e.g., up to 1% of the loan approved, with a minimum fee).
• Facility/Establishment Fees: Charged by the bank for setting up the loan (e.g., 2% once-off or 3-6% of the loan amount).
• Application Fees: Some banks charge a non-refundable application fee.

Example (Illustrative - consult a professional for current rates): For a property valued at US$70,000, combined costs could range from US$5,000 to US$10,000 or more, depending on the deposit and specific fees, which must be available upfront.

5. Commit to a Long-Term Investment

Financial Commitment: Purchasing a home is a significant long-term financial undertaking, involving ongoing mortgage obligations and property taxes.

Maintenance: Property requires continuous maintenance to retain and grow its value. Factor in costs for:

• Regular upkeep.
• Potential repairs and renovations.

Equity Growth: It typically takes several years for substantial equity to build in a property, especially if a small deposit was paid.

Iliquid Asset: Property is not an easily or quickly sold asset. A long-term perspective and commitment are crucial for success in the Zimbabwean property market.

Zimbabwe Property Market Insights:

• Market Growth: The Zimbabwean residential real estate market is projected to be valued at approximately US$85.35 billion by 2025, driven by urbanisation and diaspora remittances.
• Appreciation: Prime locations, particularly in Harare, are seeing annual appreciation rates of 8-12% for luxury properties.

Demand Drivers:

• High demand for houses, especially in Northern Harare suburbs.
• Growing interest in land for investment and speculation.
• Increased demand for secure, gated communities.

Economic Factors:

• The use of the USD in real estate transactions provides a degree of stability.
• High-interest rates and stringent mortgage requirements can limit access to finance.
• Construction costs and currency fluctuations influence property prices.

Navigating the journey of homeownership in Zimbabwe requires strategic financial planning and a clear long-term vision. By diligently addressing these five steps, prospective buyers can secure a stable investment, contribute to their personal wealth, and establish a solid foundation in the vibrant Zimbabwean property landscape.