The current economic downturn coupled with recurrent cash shortages has triggered a reduction in both residential and commercial property rentals. There has been a phenomenal shift in the balance of power in favour of tenants.
The mushrooming of housing cooperatives and cheap residential stands on rezoned farms on the city’s outskirts coupled with the increasing availability of mortgages on much easier terms and conditions has further decimated an already shrinking tenant market, adding to landlords’ nightmares.
A survey of estate agents and landlords by Harare News revealed that rentals have tumbled by rates of 15 to 50 percent depending on the area.
A one bed-roomed flat in Harare’s avenues area which used to fetch $450 in monthly rentals is now attracting between $250 to $350 depending on the state of the property.
Upmarket flats in the Avenues that used to attract $1,000 to $1,200 have since reduced to $800.
Similarly, rentals in most high density areas have dropped from around $60 per room to $50 or less.
Rent for commercial properties in the CBD have also fallen as tenants seek cheaper office space that to match their diminished profit margins.
Landlords offering accommodation in upmarket, low density suburbs are feeling the biggest pinch, as departing tenants are increasingly difficult to replace.
Fortune Mandisona, owner of a Mount Pleasant house which he was renting out to a family said he has struggled to find a new tenant since the old couple that rented his house decided to move into a smaller home they had acquired through a mortgage being sponsored by now grown up children.
“Low density properties now take a lot of time to get a tenant replacement,” Mandisona said.
“You would rather give in to a tenant’s request for a cut in rental than wait for a new tenant who may not even agree to pay the amount that your old tenant has been paying.
“The default rate in low densities is higher too because if a tenant skips rental of, say, $900 in a single month, it gets difficult for them to afford double the next month.”
Prospective tenants are now consistently budgeting less for rent as families are hard pressed by the economic downturn.
Those who can afford to rent expensive properties are often choosing to take on a mortgage rather than pay high rents.
This has left upmarket property owners scrambling for the few stable tenants among nongovernmental organisations, big companies, and embassies.
In high density areas, cooperatives have come as bad news for landlords whose tenants are moving into stands bought on very cheap terms, even though some are almost completely undeveloped.
Rooms in the thousands of new houses on the outskirts of town are available for as little as $20 per month.
In spite of this, real estate experts say that properties in high density areas are a better investment option as up to five families have no qualms sharing a house.
Landlords renting in areas such as Chitungwiza can hold their profit levels by decreasing rents while accommodating more tenants.
Says Knight Frank Zimbabwe property consultant Washington Musiiwa, “There is a major kwashiorkor of jobs in the economy where the majority have been reduced to vending. When a family’s circumstances change, most often it is in the wrong direction and involves cutting costs which no doubt leads to decreased demand for rentals.”
Commercial property owners have not been spared the nightmares as businesses such as law firms have retreated to city outskirts where they are renting homes in cheaper and more tranquil environments with easier parking than in the CBD.
In the CBD a 26 square metre office might cost $200 per month whereas a full house with several rooms, free parking, and a borehole in nearby suburbs costs $300 to $500.
Property businessman Stephen Margolis says the situation is frustrating.
“Rentals are down and are still coming down because of the economic depression, cash shortages, people not paying… some are running away with your rentals,” he said.
“Those who are paying are paying in bits and pieces. Some spaces spend months empty, people are negotiating rent downwards and you are forced to understand them because they have to survive too. So there are many frustrations.”
Frank Knight’s Musiiwa believes it’s a problem that is setting in. “This problem will be with us for as long as the economy remains illiquid. Again in the absence of genuine mortgage financing to prop up prices for properties, rentals will remain subdued. If property values improve, and individuals’ disposable income improves as well, then and only then will rentals begin to enjoy a rebound.”