Hyperinflation continues in Zimbabwe

The hyperinflation that has defined the Zimbabwean property market for the last few years is expected to continue with few changes into the 2008 calendar year.

While many parts of the economy in the African nation of Zimbabwe have been stagnant over the years, one of the sectors that have seen extreme growth bordering on the unbelievable is the property market. With very little supply of housing to go around a lot of demand for residential properties within the area, prices have been skyrocketing almost since the turn of the century in Zimbabwe and within the last two years prices have absolutely taken off.

In mid 2007, the inflation rate for the year was somewhere in the region of 5000%, making the Zimbabwe property market one of the fastest growing in the world, with people who made property purchases earlier seeing extremely large returns on their purchases. This has prompted even more demand with no increased supply. Even as more property companies started to go public and list themselves on the stock exchange, hyperinflation continued throughout the second half of 2007.

Now, however, it is expected that the situation is going to continue through 2008 as there are no plans in the works in Zimbabwe to address any of the supply side issues, and it is only through those issues being addressed that any real changes can hope to be made to the overall situation.

According to Moses Mazibiye, a spokesman for Fairvest Real Estate Limited, investors were not expecting "...much change in the sector unless the supply side is addressed. Right now, there are only a few projects coming up from the construction sector and stocks for residential properties are still low."

Stephen Kapfunde, an investment manager for the Zimre Property Company, offered partial reasons for the supply problems. The relative lack of natural resources within the country as well as problems on the part of many property developers with getting the debt financing needed to expand their holdings is one of the primary issues according to Kapfunde.

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