IMPORTANCE OF REAL ESTATE IN ZIMBABWE
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By Ashely Moyo
Real estate is the property, land, buildings, air rights above the land and underground rights below the land. There are four types of real estate and these include residential, industrial, commercial real estates and land itself. In Zimbabwe the real estate business mainly deals with the ownership and transfer of physical properties and the services they provide they are mainly to satisfy the customers. The services provided include property valuation, sales, management, auctioning, and property development hence it is of importance because it is the key driver of economic growth.
The value of real estate does not depreciate in the same way as other properties do for example personal property like cars and furniture lose their value and worth over a lengthy period.
A real estate will always have a high value and may increase over time due to the renovations that may be done to the property. Even during inflationary periods real estates won't lose their values and during this time they are ideal for investment purpose. Real estate is an enabler of economic activity. By offering the space for businesses to operate it effectively provides the infrastructure to operate in and this adds value to the economy. This is because more business will be created due to the availability of infrastructure and space to operate in. The commercial sector which includes the retails and offices are the most prominent users of real estate as they require space to operate in and also housing and factories require the services of real properties.
Real estate is a source of employment in all sorts of areas, not only for architects, builders and engineers, but also for legal and financial advisors, surveyors, facilities managers and all those that provide for the construction industry.it is an income generating asset. There are people who buy real estate with the purpose of letting others to rent it to generate income. They make it their business and not just their home.it is also the source of revenue for the government through various tax heads in which the real estate is exposed to, that is capital gains tax in the event of a sale of a property, conveyancing, property tax, value added tax, presumptive tax, income tax and payee. The real estate industry also helps in improving technology. This is due to the fact that new and modernized buildings are evolving it means engineers and contractors are always researching new ways of improving how buildings are constructed so as to meet the new and better structured buildings. Also new materials are researched and this improves the quality of buildings to be constructed. Real estate also helps in the planning of cities and also in redesigning them. This helps in making cities to be constructed in an orderly manner which is not haphazard.
Apart from the mentioned real estate creates new economic activities sectors. Activities such as stadiums are built and also golf courses. Senior citizen housing is also developed and Children's homes are developed.
However, looking at our own country, real estate is not that vibrant this because of a myriad of challenges stemming from economic problems which have left businesses and investors battling for survival and struggling to pay rentals. This has resulted in growth defaults and property voids. A number of manufacturing companies have folded or curtailed production, the supply of industrial space exceeds the existing demand hence investment has been low due to high capital cost and the depressed economic activity. Several projects with potential of adding value to the economy in the developing world have suffered still birth and some of them have failed to make way out of the boardroom. Some projects have been delayed as a result of lack of foreign direct investment into the country this has slowed development to take place.
The existence of the three tier system has adverse impact to the real estate and the economy as well because the price of a commodity is discriminated in that it has three different prices in cash that is bonds, United State dollars and the eco-cash. This has further pushed the prices up making it cheaper for those with excess disposal income such as USD to continue their individual developments. Moreover, those that do not have excess income their development has stopped as they cannot afford to buy raw materials that are required and thois slows development.
By Ashely Moyo
Real estate is the property, land, buildings, air rights above the land and underground rights below the land. There are four types of real estate and these include residential, industrial, commercial real estates and land itself. In Zimbabwe the real estate business mainly deals with the ownership and transfer of physical properties and the services they provide they are mainly to satisfy the customers. The services provided include property valuation, sales, management, auctioning, and property development hence it is of importance because it is the key driver of economic growth.
The value of real estate does not depreciate in the same way as other properties do for example personal property like cars and furniture lose their value and worth over a lengthy period.
A real estate will always have a high value and may increase over time due to the renovations that may be done to the property. Even during inflationary periods real estates won't lose their values and during this time they are ideal for investment purpose. Real estate is an enabler of economic activity. By offering the space for businesses to operate it effectively provides the infrastructure to operate in and this adds value to the economy. This is because more business will be created due to the availability of infrastructure and space to operate in. The commercial sector which includes the retails and offices are the most prominent users of real estate as they require space to operate in and also housing and factories require the services of real properties.
Real estate is a source of employment in all sorts of areas, not only for architects, builders and engineers, but also for legal and financial advisors, surveyors, facilities managers and all those that provide for the construction industry.it is an income generating asset. There are people who buy real estate with the purpose of letting others to rent it to generate income. They make it their business and not just their home.it is also the source of revenue for the government through various tax heads in which the real estate is exposed to, that is capital gains tax in the event of a sale of a property, conveyancing, property tax, value added tax, presumptive tax, income tax and payee. The real estate industry also helps in improving technology. This is due to the fact that new and modernized buildings are evolving it means engineers and contractors are always researching new ways of improving how buildings are constructed so as to meet the new and better structured buildings. Also new materials are researched and this improves the quality of buildings to be constructed. Real estate also helps in the planning of cities and also in redesigning them. This helps in making cities to be constructed in an orderly manner which is not haphazard.
Apart from the mentioned real estate creates new economic activities sectors. Activities such as stadiums are built and also golf courses. Senior citizen housing is also developed and Children's homes are developed.
However, looking at our own country, real estate is not that vibrant this because of a myriad of challenges stemming from economic problems which have left businesses and investors battling for survival and struggling to pay rentals. This has resulted in growth defaults and property voids. A number of manufacturing companies have folded or curtailed production, the supply of industrial space exceeds the existing demand hence investment has been low due to high capital cost and the depressed economic activity. Several projects with potential of adding value to the economy in the developing world have suffered still birth and some of them have failed to make way out of the boardroom. Some projects have been delayed as a result of lack of foreign direct investment into the country this has slowed development to take place.
The existence of the three tier system has adverse impact to the real estate and the economy as well because the price of a commodity is discriminated in that it has three different prices in cash that is bonds, United State dollars and the eco-cash. This has further pushed the prices up making it cheaper for those with excess disposal income such as USD to continue their individual developments. Moreover, those that do not have excess income their development has stopped as they cannot afford to buy raw materials that are required and thois slows development.
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