ZIMBABWE Stock Exchange listed property group Mashonaland Holdings profit for the year ended September 30 dropped to $17,2 million from $34,2 million due to growing administrative costs.
Business Reporter
Revenue for the period under review was 31% up to $7, 4 million due to continued rent reviews, the company said. Property management costs and voids related to operating costs continued to be key drivers of this expenditure.
Turning to mortgage financing, the group said the long-term financing of properties was yet to stimulate activity in the sector due to capital constraints on the domestic market.
“The market witnessed the return of limited mortgage finance. The impact of these real estate financing instruments are yet to be realised.
“Policy inconsistencies and liquidity constraints continued to stifle the general,” said group chairman Elisha Mushayakarara in a statement accompanying its financial results.
“Pressure on rental growth began to manifest against a backdrop of lukewarm economic performance.
“There were also limited developments in the office sector.
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“These were of speculative nature, with developers taking positions ahead of a possible economic turnaround.
“On the other hand, the residential developments were driven by tangible demand in the form of huge housing backlog.”
The government last month announced plans to reintroduce Paid-Up Permanent Shares (PUPS) as Treasury seeks to stimulate mortgage financing. Presenting the 2013 National Budget Finance minister Tendai Biti said PUPS would enable building societies to raise long- term funding for periods up to two years. The PUPS were designed to mobilise private sector funds for housing by enhancing building societies’ competitiveness in attracting deposits. The conditions entailed that at the end of each financial year, each building society had to make up a quarter (25%) of the mobilised funds available for low-income housing.
Biti said government would soon introduce a piece of legislation to allow banking institutions to offer mortgage finance.
He added that the changes also sought to exempt banks offering mortgage finance from paying income tax with effect from 2013.
