Propertyadvertising – The Real Estate Institute of Zimbabwe has submitted an application to the Zimbabwe’s Ministry of Industry and Commerce requesting for the real estate sector to be classified as an essential service.
This comes after the Zimbabwean government on 15 February announced an extension of a lockdown that allowed only essential service providers to operate, while many business entities, which have not been active since the initial lockdown in April 2020, still remain closed. These include the property sector, which, despite the huge contribution of the sector to the national economy, has not been allowed to open.
Real Estate Association of Zimbabwe President Alexander Millin says, “This is a justifiable request as real estate is omnipresent and most of the other essential service providers are housed in buildings and require round the clock service provision from real estate practitioners. The sector can support the efforts of government to curtail the spread of the pandemic by being the vanguard of compliance in ensuring tenants adhere to the regulations.”
The Covid-19-induced lockdown has resulted in declining revenues and cash-flow in the local property sector, with real estate experts calling for government intervention and win-win negotiations among players in the sector. On the residential level, revenue from properties has declined significantly as tenants struggle to meet rental payment obligations, says Millin. “Both property owners and tenants are feeling the negative impact of the pandemic. Both parties have to negotiate and reach a win-win compromise,” says Millin.
Most employees are now working from home as they adhere to lockdown regulations that stipulate that the workplace must be decongested. Among other regulations is the need to observe social distancing, which implies that some workers have to carry out their duties at home, of course with the help of the internet in most cases. Millin explained that due to the current lockdown, occupancy levels of offices have decreased significantly as tenants now have to work from home. For those organisations that no longer have to pay rent, this indeed comes as good news to them, but what about the landlord?
“Property sales have decreased as some property owners have decided to put the sale of their properties on hold,” Millin further explains. “Uncertainty remains high as the pandemic seems not to be abating.” The property sector is intricately linked to a vibrant economy and thrives together with it. The sector comprises of property development, investment, sales, leasing, valuations and management, which all suffer directly and indirectly due to the lockdown, as such the Zimbabwean government may want to revisit its stance regarding the property sector, as it is a major driver of economic activity.
The Real Estate Institute of Zimbabwe says that real estate development suffered a 32% business decline in 2020. A study by Kelvin Zhanda (2020) found out that the COVID-19 pandemic has had effects on all areas of the real estate business with property development forms and management being the worst affected in Zimbabwe.
Real estate development businesses have closed down, retrenched, downsized and changed location. This has resulted in more job losses within the property development sector, and also loss of incomes by employees. Rent defaults, vacancies and deferrals for office spaces and residential areas are on the rise.
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