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Africa Moyo Property Reporter
OLD Mutual Zimbabwe is staring the prospect of struggling to sell its 1 082 housing stands launched in Bulawayo a fortnight ago on the back of a potentially punitive initial deposit of 30 percent.

The company’s stands measure between 200 square metres and 1 100 square metres and are being sold for $20 and $30 per square metre, which is relatively cheaper compared to the average of $70 per square metre being charged by other real estate firms.

However, for an ordinary low-income earner with a net salary of $350, if they purchase a 200sq metre stand at $20 per square metre, the initial deposit would be $1 200.

While the balance of $2 800 has to be paid in a year’s time, the premium of $233,3 per month is fairly huge for the target market – low-income earners and small and medium enterprises.

Old Mutual, which is smarting from the disappointing performance of its Budiriro housing project, seems to have learnt little or nothing if charges for the Bulawayo projects are anything to go by.

The Budiriro houses, which cost between $21 000 and $27 000, initially demanded a 30 percent deposit but has since been reviewed downwards to 10 percent. However, a measly 800 units had been sold by July last year from the total of 2 879 houses erected.

Individual financing for the Budiriro scheme is provided by CABS, a member of the Old Mutual group.

In Bulawayo, Old Mutual expects to deliver 596 developed stands in Pumula South and 486 in Nkulumane.

Despite the potentially high initial deposit of 30 percent and the limited repayment period, Old Mutual chief executive officer Mr Jonas Mushosho said demand for the stands is high.

Mr Mushosho said there is a “three tier pricing structure” for the Bulawayo stands, adding that it is earmarked for the “general populace”, as well as being “designed with the small to medium traders in mind”.

“The major requirements for Pumula South Stands are; a deposit of 30 percent and, one needs to be registered with the City Council and be on the housing waiting list.

“This implies that the deposit needed can be raised from the various informal income streams that one may be undertaking. After this deposit, buyers are allowed to raise the balance over 12 months,” said Mr Mushosho.

Preselling of the stands started in May last year and Mr Mushosho said there is a “big demand” for the stands, even before development works had even begun.

He added that more applications are undergoing the vetting process and expectations are high that the 596 stands in Pumula would be sold off by June 2018. After that, Old Mutual would shift focus to the 486 stands in Nkulumane.

But analysts fear some of the people that subscribed for the 300 stands might fail to pay the premiums and eventually lose them.

Servicing of stands is underway, targeting road grading and tarring, sewer and drainage system installation as well as provision of running water.

On completion of the Bulawayo projects, Old Mutual would have delivered 3 961 houses/ stands across the country, if the Budiriro project is taken into account.

Apart from the housing projects, Old Mutual is also constructing a massive SMEs Centre in central Harare.

Mr Mushosho believes the SMEs Centre would accommodate several enterprising Zimbabweans that are battling for “decent and convenient trading space as well”.

The facility, a first in southern Africa, is set for completion by June this year.

The Old Mutual SME Centre is expected to have a lettable space of just under 12 000 square metres.