On June 17, the United States Federal Reserve left its benchmark interest rate unchanged at 3.50–3.75% — the fourth hold in a row, and the first under new chair Kevin Warsh. Nine of its 18 policymakers now expect the next move to be a hike, not a cut, and the Fed’s own projection sees the rate near 3.8% by year-end.
Stripped of central-bank language, the message is simple: money is staying expensive.
That sounds like a New York problem. It isn’t. The price of money is the one number that quietly runs every market on earth, and it has already reached Harare.
Here is why. Whatever you are buying — a share on Wall Street, a condo in Toronto, or a house in Borrowdale — you are really asking one question: does what this asset earns beat what my money costs? If the rent or the dividend clears your cost of capital, the asset pays its way. If it doesn’t, you are paying for something else — safety, hope, or a story.
Now watch what happens to the hurdle as we travel. In the United States, safe money costs about 3.75%. In Canada, add a mortgage and a risk margin and a property has to clear roughly 5% or more.
In Zimbabwe, the same calculation gives a cost of capital of about 12.4% — and once you add the real costs of owning a building, the break-even climbs to roughly 16.6%. The same question, three very different bars. Zimbabwe’s is the highest of the three, because Zimbabwe’s risk is priced the highest.
So does Harare property clear its bar? In our first research report, we measured the rent each suburb actually earns against its price. Not one segment cleared the hurdle.
Gross rental yields ran from about 5.6% in Harare North to 12% in the high-density suburbs — every one of them below even the 12.4% cost of capital, let alone the 16.6% a property must really earn. Priced against the rent it produces, Harare North sits roughly 196% above fair value; the high-density market about 38% above. On the income it generates, Harare property is overvalued on every street.
That raises a sharper question, and it is the reason this matters to people who will never buy a Borrowdale mansion: who is holding the overvaluation? The answer is the institutions that hold your money. Zimbabwe’s pension funds have 44.1% of all their assets — US$1.16 billion — sitting in property that earns a rental yield of about 3.7%, against that 12.4% cost of capital.
The banks own the same buildings: where they disclose it, investment property equals 34% of Stanbic’s equity and 27.5% of BancABC’s, and most banks do not disclose the figure at all. The same overvalued asset, carried on paper, sits inside the pension you pay into and the bank that holds your salary.
For two years, this looked like growth. In 2024, almost 80% of pension-sector “income” was not rent or dividends — it was the value of property being marked upward on a spreadsheet.
Banks told the same story: in early 2024, 61% of banking-sector income came from revaluation gains. Then the Zimbabwe Gold steadied, the mark-ups stopped, and the paper income vanished — pension income fell 78.7% in the first half of 2025, and bank revaluation income fell to almost nothing. The buildings are still on the books at full value. The income that justified them is gone. Here is the honest part, the part most commentary gets wrong: overvalued is not the same as a crash.
Harare’s property market is cash-funded, not built on dangerous debt; it has a replacement-cost floor and it works as a store of value. It mean-reverts; it does not explode. This is exactly why doing the analysis beats guessing — the responsible conclusion is “expensive, and carried in the wrong places,” not “panic.”
But carried in the wrong places is the problem. When a bank’s property is re-priced, shareholders take the hit — they chose the risk and can sell.
When a pension fund’s property is re-priced, the loss lands on members who never chose the exposure and cannot exit it. In 2024, the average monthly pension benefit was about US$30 — what the regulator itself called roughly thirty loaves of bread. There is no buffer there to absorb a write-down.
So when you read that the Fed held rates again, do not file it under “American news.” It is a reminder that the cost of money is high everywhere, that the bar every asset must clear has risen, and that in Zimbabwe — where the bar is highest of all — a great deal of retirement and deposit money is sitting in an asset that does not clear it. The remedy is not complicated: the institutions that hold this property should be required to show what it earns and what it would be worth at an honest yield. Sunlight, not panic.
What should you do with this? If you sit on a pension board or a trustee committee, ask your administrator one question at the next meeting: what rental yield does our property actually earn, and what would it be worth if it were re-priced to a fair return? If you run a business that rents space from these institutions, understand that the pressure to close the gap between 3.7% rents and a 12.4% cost of capital eventually arrives in your lease — as higher rent, or as a landlord under strain. And if you are simply a saver, you are entitled to ask the fund holding your money to show its working. None of these are radical requests. They are the ordinary questions a healthy market asks when it is allowed to see the numbers — and the honest answer is usually worth more than the comfortable one.
The one question travels everywhere. Before any asset — a share, a building, a pension allocation — ask it: does what this earns beat what my money costs? In Harare, for property, the answer today is no. Knowing that is the difference between investing and hoping.
*Streetwise Economics applies international-standard valuation and cost-of-capital analysis to Zimbabwean decisions — every figure verifiable, every method reproducible, and then explained in plain language. On commission, that work includes independent cost-of-capital and valuation reviews; portfolio and property-exposure assessments for pension funds, insurers and banks; and pricing or “second-opinion” diligence on deals and allocations. The full reports, data and code behind this article are open.
If your organisation faces a version of this question — a property book, a pension allocation, a deal that needs an honest second look — this is the work I do. The first conversation is on me.
Isaac Jonas · Streetwise Economics · www.streetwiseeconomics.com · isacjonasi@gmail.com