ZAMREAL – Zambia’s Premier Property Conference.
The property highlight for last month was definitely ZAMREAL – Zambia’s leading property forum that brings together real estate thought leaders from Zambia and the region. I have attended this conference since its inception four years ago and I always come away with tons of information and insights about the real estate market.
- Overview of the Real Estate Market – Despite the tight economic situation, Zambia’s demographics – a growing population that is highly urbanised – point to strong demand for real estate in the future. However, affordability has become more important than ever. Growing demand has to be coupled with affordable housing and affordable mortgages to allow more people to access the property market. During any economic cycle, a real estate investor should be able to make money but they must keep an eye on affordability – how much should you borrow, at what price and for what tenor?
- Sustainable Returns – The Zambian market is going through a market correction where high property values and high rentals are now coming down to more realistic values, forcing investors to become realistic about their returns and reminding us that property is, and always has been, a long term game. The time of short and even medium term returns are behind us.
The conference was packed with different speakers and interesting sessions. There was a lot of information shared! I’m going to share my top insights with you in two parts:
3. Financing – Due to the high cost of borrowing in kwacha, dollar denominated mortgages makes lending to you in the diaspora, who are earning in foreign currency, very attractive (look out for a future video on this!)
4. Residential – The infrastructure projects to increase the road network has seen Lusaka expand outwards. This has contributed to the successful sale of serviced plots on the outskirts of Lusaka. As a result, incremental house construction has become very popular in the last few years.
5. Commercial – It was confirmed that we are in a buyer’s market and certain properties will not be as ‘cheap’ as they are now. It’s also a tenant’s market as there is an over supply of office space, particularly in Lusaka and Ndola, forcing landlords to listen to tenants demands on rentals. Not surprisingly, there are very few malls under construction.