Beyond Recovery? Downturns, Implications and Prospects of COVID-19 Pandemic to Real Estate Development in Zimbabwe

Abstract

Real estate development plays a pivotal role in the growth of macro economies worldwide. Until recently there has been little, if any, concern over the impact of public health emergencies to real estate development process let alone recoupling mechanisms for Zimbabwe’s real estate developers. Many changes have occurred to real estate development amid the ongoing COVID-19 pandemic and economic instability that has impacted the already struggling real estate development sector in Zimbabwe. Thus, this paper aims to examine the implications of COVID-19 pandemic to real estate development and its prospects for recovery in Zimbabwe. The paper focuses on the implications of COVID-19 to the four forms of real estate development namely: new developments, repurposing, refurbishment, and redevelopment. The study employed a desktop study and survey of selected real estate developers as well as content analysis methodology. Evidence in Zimbabwe shows that many new developments have almost stopped and some will hold back for an indefinite time. The real estate development industry is largely based on revenue accrued from the real estate projects’ proceeds and funding from banks. Thus, the study seeks to answer questions of the nature: will the financial institutions continue to offer financial help to real estate developers? What will be the legal wrangles of missing the projects' delivery dates by developers? While the key players in the real estate development process have seized the pandemic as an opportunity to demolish and refurbish the buildings, some real estate developers are halting projects citing revenue challenges. The paper indicates how the current COVID-19 pandemic may affect the real estate developers’ future “appetite” and determine the future of real estate development. The paper, therefore, builds the basis for future real estate development policies and indicates the need for reforms to shield the sector from pandemic shocks.