By Cain Ndhlovu
The state of the property market is a reflection of the economic path the ambitious Zimbabwean take from being a peasant to a wealthy person. An analysis shows that we all belong to four market segments namely the high, medium, transitional low and affluent low densities.
The high density (house prices $20 000.00 [core house] – $50 000.00 eg Warren Park, Highfield) is home to low-income earners most of whom informal sector sole traders and vendors earning below the poverty datum line of $400.00.
The medium density (house prices $55 000.00 – $100 000.00 e.g Mainway Meadows, Southerton) is home to the middle class usually junior managers and small size business owners employing few people.
Transitional low density (house prices $100 000.00 – $230 000.00 eg Good Hope, Mandara, Prospect) is where individuals can transition from the medium density to the affluent low density.
In the transitional low density, you are likely to come across newly promoted directors of larger enterprises and medium size business owners who would have managed to grow their enterprises from a smaller size operation.
The last but not least is the affluent low density namely the Umwinsidale, Borrowdale and Glen Lorne of our days. Here you find the elite, the movers and shakers in politics, industry and commerce. The cheapest house here is around $240 000.00 whilst the most expensive can be almost a million dollars!
The movers and shakers in politics
Many of my clients who have transitioned from the high densities to the lower densities over the years found it best to take it one step at a time. This means that they moved from the high to the medium and then from the medium to the lower densities instead of jumping from the high densities and going straight to the affluent low densities. So one can ask “If I manage to get a lump sum of $240 000.00 why can’t I just go straight to the affluent low densities and buy a house in Borrowdale?”
Well with property its not only about the asking price which is the money required by the seller but it’s also about extra costs that come over and above the asking price. Extra costs are in two forms; there are those directly associated with the purchase of the property like name transfer fees and there are those more like running expenses that are incurred as you use the property like municipality rates.
After acquiring the lump sum one should first remember that the stomach will always demand that you eat and the kids will need to go to school. Therefore, there should always be a good monthly income that is able to meet the basic needs of life together with the higher costs of being a resident in the affluent parts of the country. Let’s take a look at the extra costs.
Name transfer costs
In my nine-year real estate career I have observed that many aspiring property owners do not know that over and above the asking price on the property advert, there are additional name transfer costs that are determined as a percentage of the purchase price.
This percentage can be approximately 7% which means over and above the cheapest price of $240 000.00 one will pay $16 800.00 in order to have the property’s ownership legally transferred to his or her name.
This will bring the total of the money coming out of your pocket to $258 000.00 excluding bond registration and valuation fees if you are using a mortgage. A good monthly income can help you out so that your dream is not abandoned by facilitating payment terms with the legal practitioners responsible for the transfer.
The municipality provides services like refuse collection, sewer and fresh water supply etc which must be paid for by residents irrespective of whether or not these services have been satisfactorily provided by the former.
In affluent areas, municipality rates are the highest because the valuation method used to determine them is based on the reasoning that there is a correlation between rates and capital value of the property. Since property values in affluent areas are high the rates there are also high in line with the value of the area.
This article was written by Cain Ndhlovu of https://propertymattersnews.blogspot.com. Visit this site to know more about property trends in Zimbabwe and the region.
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