Despite the fact that property prices have been on an upward trend throughout 2007, Zimbabwe is not the rosy picture many property investors might hope. As the year progressed, some mid range homes in the country had price tags higher than you might see in London, and rents have been skyrocketing. The problem of hyperinflation, though, looms large in the market, making many investors think twice. While the government has passed reform after reform in the last twelve months, none seem enough to curb the economic problems in the country, and that has led to unrest among many citizens.
The latest cure to property investors woes is to collect rent in foreign currency only, which seems to be leading to a dollarisation of the market as a whole. While plenty of officials argue that switching wholly to US dollars would help investors increase participation in the market as well as lead to better credit opportunities for local investors, others argue that where it's been tried in the past, it hasn't worked quite as well as one might hope.
One of the biggest arguments local investors have against the system is that should it find trouble, Zimbabwe's Central Bank won't be able to bail it out with a market currency injection. This has lots of concerned people, but the landlords continue to push the system toward foreign currency despite the legal regulations against such measures. This may lead to further destabilization, higher rent prices, and fewer foreign property investors in a country already calling for economic and political reform.
