Govt urged to review construction laws

Published: 30 January 2018

The country's laws governing the construction industry - last reviewed over three decades ago - are becoming an impediment to investment in the property industry, experts have said.

This is despite several changes to the economic landscape, driven by technological innovations that have subsequently changed the construction and property sector globally. Real Institute of Zimbabwe president Mike Juru indicated that while property sector was the preferred investment tool to cushion against inflationary pressure and other economic volatilities, there was need to review the country's laws and regulations to attract more investment in the sector. The laws, he said, were making construction more expensive, compared to other countries.

"Our model building by laws, which stipulate the minimum expectations for construction in Zimbabwe were last revised in 1975," said Mr Juru by email.

"With technological advancement and innovation, our specifications have been overtaken by events and sadly are making our construction costly, which at times discourages investors and makes investing in property not viable. There is urgent need to revise our Model Building By Laws to move with global trends and thereby reduce costs and delays in construction," he said.

The country's property sector has of late been hampered by increased voids especially in commercial properties as companies either downsize operations, eventually close or shift from the central business district to shopping malls or residential areas that are perceived to be cheaper. However, there has been increased demand in the residential side with the national housing backlog estimated at 1,25 million units.

Individual residential property developments across the country have been driving the sector, while other institutional developments have been undertaken with others still underway. But the country could be experiencing more activity in the sector from both domestic and foreign investors.

Mr Juru said the country lacked formal regulated vehicle that could drive property development to unlock value and attract international capital to develop the sector. Additionally, the investor or beneficiaries of property investment are not protected and do not enjoy tax benefits.

"In other economies with a booming real estate sector, they have regulated mechanisms available for investing in property through Real Estate Investment Trusts (REITS) which provide for tax breaks and formal regulated property investment structures.

"There is need for Zimbabwe to create such to allow funds to go into property development in a coordinated and regulated manner," said Mr Juru. Government has however been working on reforms to enhance ease of doing business across all sectors of the economy in a move meant to attract investment and grow the economy.
- the herald

Tags: construction,