Africa Moyo
\nNICOZDIAMOND’S housing project in Hatfield, Harare, has been put on hold following the low uptake of the housing units which are priced at US$105 000, raising the spectre that the local market does not have an appetite for high-value properties. Only five of the 20 houses that were constructed during the first phase of the Diamond Villas housing project have been sold.
\nOn the overall, 58 housing units will be constructed after the three-phased development.

\n

But the second and the third phases, which would have seen the construction and 20 units and 18 units respectively, have been put on ice pending the sale of the 15 outstanding properties.

\n

NicozDiamond managing director Mrs Grace Muradzikwa recently told The Sunday Mail Business that the demand for houses has mainly been plagued by liquidity challenges that are affecting the local market.

\n

“Basically it is the liquidity situation that we all know. I think for us, in particular, a lot of people cannot raise the deposit.
\n“At least the good thing now is that we have got 20-year tenures. Three banks are now offering mortgages over 20 years but still the pricing (of mortgages) is still quite expensive.

\n

“The interest rates are quite expensive and they (customers) still have to raise deposits of 25 percent, which is like US$25 000.
\n“So, you can imagine how many people can just put US$25 000 on the table like that. We sold five so we still have 15 which are outstanding,” said Mrs Muradzikwa.

\n

Cabs has also been similarly affected as it only managed to sell 500 of the 3000 housing units at its low-cost housing project in Budiriro as at June 6, 2015.

\n

The building society, a unit of insurance giant Old Mutual, had to relax its terms in order to attract more customers.
\nInitially, the project targeted first-time homeowners but it has since been opened to everyone who can afford.
\nIn addition, the deposit rate has been revised from 25 percent to 10 percent.

\n

In an earlier interview, Cabs managing director Mr Simon Hammond said the local cost of money is expensive because the lines of credit sourced by banks are “relatively expensive owing to the country risk”.

\n

“Banks, when lending, need to consider the costs of the credit lines and other administrative costs.
\n“There is also not enough liquidity in the market as there are no long-term deposits. Most of the deposits are transitional,” said Mr Hammond.
\nCBZ, FBC and ZB have also been forced to review their terms.

\n

NicozDiamond believes that while there is overwhelming demand for accommodation, affordable funding is still unavailable.
\nHowever, despite the challenge, NicozDiamond will not be discounting its current prices averaging US$105 000 per unit because they contend that they are in step with the prevailing market prices.

\n

“We are always checking with similar projects in that area and we actually think that our villas are reasonably priced.
\n“I don’t think pricing is an issue. If we also discounted, then we might as well put up those villas for nothing and how can we just put up villas in the market for less than what it cost us?

\n

“It wouldn’t make sense. And when you compare the quality of those villas with what we are seeing in the market, we think they are very good value,” said Mrs Muradzikwa.