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The move has raised the hopes of an eventful property development and trading year before us.
The deal worth around US$15 million will involve the building of 3 102 core houses with a potential of housing 9 306 people if one takes the assumption that every family has at least three people.

Putting it realistically, it has the potential to house more people because of our extended family principle.
The development of virgin land by putting basic infrastructure like roads and superstructure like housing is capital intensive.
The city council has in the past 12 years struggled to develop land to meet demand because of limited resources, which were and are extremely stretched in order to provide the basic services a functioning city requires.

At the moment, in Harare alone, plus or minus 70 000 people are registered on the housing waiting list in order to benefit in housing projects. It will not be far-fetched to assume that more people are not on the register as the backlog on the council register is public opinion. This inevitably leads to complacence by most people to register.
These numbers, though alarming, are a welcome reason to any investor to invest heavily in the local property market.
If, for instance, we take the CABS deal as an example, the 3 102 low-income core houses at the value of US$12 000 a unit will provide a return on investment of US$37 224 000.

That is a whopping profit of plus or minus US$22 million, plus interest attained over the mortgaged period.
In essence CABS is achieving such a huge profit while at the same time providing a national service of alleviating our housing crisis.
For the big corporates with capacity to bankroll such projects, this is profitable corporate responsibility.

It is worth noting that this window for high returns on investment is open as long as council is undergoing financial strains.
Over the past years council has attempted and to an extent succeeded in reducing the numbers of people in need of housing by entering into smart partnerships with housing co-operatives and independent developers.

The city council vows that it adheres to stringent vetting processes before allocating such land.
Some co-operatives and developers, however, failed to adhere to the strict accounting standards resulting in half-baked developments that do not offer adequate water and sanitary systems, resulting in the need for wells and pit latrines in urban residential suburbs.

This has led to unfortunate deaths and exposure to disease. Although such instances are unfortunate, it shows council’s willingness to do business by entering into strategic partnerships.
The number of plus or minus 70 000 people in need of housing should be viewed as an opportunity or potential business.
It, in fact, means that presently there is plus or minus 70 000 people renting or looking for properties to rent in the City of Harare alone.

If an investor is interested in developing property for the sole purpose of renting out, these figures portray a healthy market.
It becomes obvious that the best development in terms of investment is that which would accommodate as many people as possible on the piece of land available.
This necessarily does not have to be just low-income housing. It is imperative to realise that the crux is on affordable housing as compared to low-income housing.

Multi-family apartments on both ends of the spectrum might offer the same demand as long as they are affordable considering the amenities on offer.
As the economy rebounds, we are currently faced with a situation where many people have private property or land, which can benefit from multi-family apartments or clusters.

However, the lack of finance is derailing such projects. I therefore urge investors and corporations to support such ventures and smart partnerships with people holding title. Where such ventures are managed well, they prove to be extremely profitable while creating value in the country through job creation, alleviating our housing problem and ultimately increases economic activity by creation of service businesses in those

areas.

• Vengai Madzima is a property consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected]