'Benchmark property values'

HARARE - Zimbabwe’s property sector needs to set up a value guide, which can act as a benchmark for real estate and building costs valuation across the board, Trust Properties (TP) says.

Isaiah Chimbetete, TP’s managing director, told a recent Zimbabwe Real Estate Investment Summit that while Zimbabwean valuers evaluated property according to set and acceptable international and regional guidelines or standards, it was imperative that the establishment of the guide would improve credibility, consistency and accuracy.

“… it has been unanimously noted that there is need for the creation of a valuation guide along the same principle and base as that of the South African Property Index (Sapix) or Investment Property Databank (IPD),” said Chimbetete, adding such consultations were held with the Real Estate Institute of Zimbabwe (Reiz), registered valuers, estate agents and other professional bodies in Sadc and overseas.

Both Sapix and IPD outline the specification of data entry requirements, including the provision of guidance notes for auditors, evaluation of the quality of value forming factors and their value influencing assumptions and finally verification of the derived market value.

Chimbetete recommended that Zimbabwe’s version of the IPD could be administered by a technical secretariat housed by the Reiz.

“Alternatively, a joint technical committee could be formed under the auspices of the Valuers Council in conjunction with the Estate Agency Council deriving legal authority to compel conformity through statutory prescription,” he added.

The chartered valuation surveyor said that it would be prudent to recommend that IPD participants regularly instruct and consult with independent valuers.

“This is in line with Zimbabwe Stock Exchange (ZSE) regulations, where properties are to be externally valued periodically,” he said.

“Adherence to these recommendations would ensure unbiased and consistent reporting of valuations in Zimbabwe.”

He said that one of the major challenges Zimbabwe’s valuers faced is the short time span they have had to assess meaningful and untainted trends since dollarisation in 2009, especially when it comes to the valuation of specialised properties like hotels.

Before Zimbabwe adopted the multi-currency system, property market trends were characterised by upward shifts in value driven by hyperinflation.

 “The same challenge has been faced by valuers who have had instructions from some companies listed on the ZSE to carry out valuations of their property portfolios in order to re-align themselves with the new market values quoted in US dollars to enable them to re-assess their actual worthy,” Chimbetete added. - Kudzai Chawafambira

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