The Real Estate Market in 2022

For the greater part of the year, the real estate market has suffered the effects of an unstable operating environment characterised by economic uncertainties, surging inflation, exchange rate fluctuations, Covid-19 interruptions and global market supply interruptions caused by the Ukraine conflict.

Property Sales
In 2022 the property sales market was dominated by USD cash transactions. 

Sales trends were very much unpredictable in 2022 save for reasonably priced properties on strategic locations which were being targeted for redevelopment and change of use for commercial purposes. Stands and properties in new and secure developments were also being targeted for investment purposes given the high demand for rentals for such units.

Rentals Market 
Majority of rentals in the country are now pegged in United States Dollars. Much of the high rise office buildings in Harare and other CBDs stood almost empty in 2022 given the continuing exodus of tenants to suburbian offices.  

Retail space in the same segment has been doing quite well in terms of occupancy with several conversions of low rise buildings into pure retail space observed throughout the year. Demand for warehousing and industrial space increased in 2022 as evidenced by slight increases recorded by listed property companies.

Property Development
On the development side, several projects were witnessed across sectors and across the country in 2022. Majority of development activity was witnessed in the residential segment which also dominated sales activity as densification and expansion of cities continue. 

Industrial, retail and warehousing developments also increased in support of increasing demand for goods and services as cities and populations continue to expand. The Lithium, Platinum, Gold, etc rush has seen increasing mining and construction activity across the country.

Agricultural activities also increased demand for Industrial, retail and warehousing space. High demand for construction materials such as cement, bricks, steel, etc was the order of the day throughout 2022 with less interruptions from lockdowns compared to the previous year.

Several development projects which were put on hold in the previous years due to Covid-19 outbreak, commenced during the year.

The movement of tenants from the CBD in Harare continued in 2022 and we saw several office developments in suburbs surrounding the CBD as a response. Major roads across Harare have become a hive of development activity as a result.  

Recently launched Real Estate Investment Trusts also spurred development activity in the year especially on the commercial side with the completion of three major projects witnessed in Harare during the year.  

Conclusion

Despite the uncertainties and economic headwinds in 2022, the real estate market performed very well with a lot of activity in the sales market, improving occupancy rates and increased development activity.

Real Estate continues to offer great opportunities for individual and corporate investors and investors are moving in to take advantage of emerging opportunities and seeking to hedge against inflation, market and exchange rate risks, in face of a challenging operating environment and the uncertainty in face of the upcoming harmonized elections in 2023.