Chronicles Properties

 REAL ESTATE MARKET PLAYERS

POTENTIAL IMPACT OF COVID 19 ON THE REAL ESTATE MARKET

 (REIM, 2020) 

Fig 1 presents a flow diagram which show the potential impact of the global pandemic, Covid 19 to real estate activities and giving proposed strategies to help mitigate the risk that comes with the global pandemic.

Zimbabwean government declared a Covid 19 induced state lockdown in trying to curb the spread of the global pandemic which is resulting in massive loss of life. This resulted in unexpected halt in production and trading activities which support the real estate investments.

Commercial real estate market is one of the worst hit market as occupiers now resort to home offices and relying on online trading. This resulted in occupiers who rely on walk in customers not being able to operate thus incapacitated to pay rent. This implies that commercial real estate owners will incur risk of low Net Property Income and the financiers through Commercial Mortgage Bonds can help cushion the commercial real estate investors. 

On April 2020 Cabinet Decision Matrix 13th meeting, with respect to real estate the following were suggested:

a )both residential and commercial properties be offered a moratorium on evictions in respect of applicable lease obligations due for the period from April to the end of lockdown, including the payment of rentals due these months.

b) that any payment of the rent due from April to end of lockdown be paid in equal instalments after the end of lockdown period together with the rental payments due for those months.

c) that all rent deferrals be free of any interest chargers or penalties of whatever nature.

d)that homeowners or landlords obliged to make repayments on their properties or any other property to which the rent deferrals shall be entitled, in respect of their mortgage obligations, to similar relief mutatis mutandis.  

In light of the above, residential and commercial property owners will experience a risk of reduced operating income as a result of rent deferrals during the Covid era. This will result in negative lender sentiments, and thus a stumbling block of commercial property developments that are debt financed which in the long run will result in a short supply of office space.

TECHNOLOGY

Proptech , Virtualization and Augmented realty are new buzz words in real estate management and these technological milestones are transforming the industry.

The above mentioned technological initiatives are part of the parcel of cloud computing which is a cloud computing platform that enable the delivery of cloud computing services via network.

These cloud computing technologies include virtualization, services on oriented architecture, grid computing and utility computing.Zimbabwe real estate practitioners should try to ensure that they research on ways to make use of cloud computing services such as Saas(Software as a Service), Paas(Platform as a service) and Laas( Infrastructure as a service) to ensure that there is improved service delivery.

 

Zimbabwe Real estate market have a gap in as much as the application of real estate technology is concerned. The Deeds Registry  office took an initiative in trying to ensure that there is transparency in the industry through creation of an online platform “Zimconnect” that allows real estate practitioners and ordinary citizens to access property ownership details.

Located
 in
 the
 Ministry
 of
 Justice, the Deeds Registry office has the exclusive

authority
to
register
rights
in
land.
The
Deeds
Registries
Act
and
the
Deeds
RegistriesRegulations
(Rhodesia
Government
Notice
No.249
of
1977)
regulate the
registration
of
rights
in
land
through
a
system
that
requires
the
services
of
a
Registraras
well
as a Conveyancer
in
professional
practice.




Zimconnect platform is one way of using Virtualization to ensure there is improved service delivery, this substitute the use of a physical server with the use of cloud computing technologies.

The objectives of creating the “Zimconnect” platform are:

• To ensure transparency
• Reduce registration days from 20 days to 8 days

• Checking ownership and encumbrances online
• Minimise transfer cost

The Deeds Registry office as a hub for all formal land transfers, taking a stride in ensuring that there is online deeds check helps to reduce transfer costs as the transport costs to conduct deeds search and the time spent on searching for ownership documents are reduced.