Q2 – 2019 Real Estate Commentary

Real Estate market continued to slow down in Q2.

While it is clear that government austerity measures are meant to reduce the pressure the Zambian Economy is facing, the second quarter of 2019 has not been easy for real estate players. The forecast for the growth of the economy is around 3.2% in 2019 and expected to drop to around 2.7% in 2020. There is a reduction in consumer spending due to reduced economic activities and this has been seen in real estate also. The inflation rate is expected to be kept between 7.5% and 10%. Although the Bank of Zambia monetary base rate is at 10.75% most Banks are lending between 20% to 30 %.

The residential market has seen an increase of supply for the medium-cost units due to mainly two factors namely offloading of recovered properties by financial institutions and new constructions. According to many real estate agents, there has been a reduction in sales of real estate generally. Q2 has seen the rental market for Houses, Offices and Industrial properties remaining within the same range, however, there is a push for a downward trend and we foresee new leases to reflect that. The same applies to the prices, although we don’t see an immediate reduction but a slower increase in the prices. Land values are also following the same trend. An average medium three (3) Bedroom house is between K3,000 to K4,500 per month and around K450,000 to K950,000.

Q2 has seen a further increase of office space coming on the market especially in Lusaka and a few on the Copperbelt. Office rentals are currently between 10 USD and 18 USD per square metre, we project a downward reduction due to increased supply and dwindling demand. Q2 also showed an increase in Retail shops tenants vacating shopping malls. This is mainly attributed to subdued sales and the depreciation of the Kwacha against the Dollar. The current rentals for the retail shops are between for most shopping malls are around 12 USD and 35 USD per square metre per month for shopping malls within and around Lusaka and 5 USD and 15 USD per square metre per month for shopping malls within and around the Copperbelt province. For retail shops to attract businesses to rent, the rate per square metre has to reflect the current economic trends and also consider having lease agreements in Kwacha.

Q2 also continued to see the development of Industrial Parks mainly in Lusaka and the Copperbelt. Though there is demand for fully serviced warehouse/office facilities for rent the demand currently is not meeting the supply. Industrial properties are currently going around 2 USD and 6 USD per metre square per month. Zambia has attracted a lot of investments in Agriculture which has seen a lot of Farming Blocks created. The major factors affecting values of agricultural properties is accessibility by all-weather road network and availability of water for irrigation. The agricultural sector has seen very low sales, going rates are around 1,300 USD to 3,000 USD for Irrigated land, 600 USD to 1,600 USD for Cleared land and 100 USD to 400 USD for Bushland.

So what does this mean if you want to buy?

The current market conditions are unprecedented. There are a lot of people who want to dispose of their property to meet various financial obligations. Though due to high-interest rates real estate buyers are finding it increasingly difficult to get the funding required.

There are a number of sellers for various properties, so as a buyer your choices won’t be limited. And better yet, the prices of the properties be it residential, commercial, industrial or agricultural are not expected to go up as fast as previous years. This means as a buyer you will definitely have the negotiating advantage.

What does this mean if you are looking to sell?

The current interest rates around 20% to 30% are making it difficult for many buyers getting adequate financing. The slow economic activities and business transactions have led to high Non-Performing Loans which are above the prudential threshold of 10% resulting in many Banks off-loading a lot of recovered properties or owners looking to sell.

As a seller, you will be competing with the number of properties on the market reduced for a quick sale. If you have no option to hold but just sale you have to be patient and aggressive to expose your property to many potential buyers either locally or internationally.

Whatever the situation is, always use professional help to navigate your property market decisions.

By Mr Chisebwe Fumbeshi
Author is a Chartered Valuation Surveyor, CEO & Chairman of Fairworld Properties Limited, Executive Chairman of Money FM 93.7

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Valuation Chapter The Surveyors Institute of Zambia Business Breakfast 17th May 2016 Speech by Mr Chisebwe Fumbeshi, Chairman

Valuation Chapter
The Surveyors Institute of Zambia
Business Breakfast 17th May 2016
Speech by Mr Chisebwe Fumbeshi, Chairman

Dr. Bwalya Ng’andu BOZ Deputy Governor Operations
Invited Guests
Valuation Surveyors Registration Board Members
Surveyors Institute of Zambia President & Council members
Fellow Valuation Surveyors
Media House
Ladies and gentlemen

Good morning, I welcome you all to this Business Breakfast for the Valuation Chapter of Surveyors Institute of Zambia. Dr. Ng’andu thank you for taking time off from your busy schedule to come and be part of this breakfast, whose theme is “The Role of Valuation Surveyors in the Financial Sector”.

Ladies and gentlemen
The Valuation Chapter of Surveyors Institute of Zambia promotes high standards of professional & ethical conduct for the Valuation profession.
The Valuation Profession in Zambia dates back as early as 1890, when the British Administration introduced the English
Tenure system in the territory. The determination of value of properties for all purposes in accordance with Chapter 207 of the Laws of Zambia is responsibility of Valuation Surveyors. It is a criminal offence for anyone to carry-out Valuation activities or purport to be a Valuation Surveyor. We need to protect the interest of players in the financial sector from imposters at all cost.

Ladies and gentlemen

The financial sector is an essential component for the growth of an economy. Zambia’s financial sector is dominated by banks, accounting for about 90 percent of the financial sector assets. The Valuation profession is vital in the day to day interaction of the Banks and their clients for the determination of the Value of property pledged as collateral, and when things go wrong to advice on sale price.
The Financial Sector will benefit from more property owners appreciating the importance of accessing Valuation Services regularly. In a recent random survey carried out in Lusaka and Copperbelt provinces, 77% of respondents were not aware of the importance of carrying out a valuation before purchase and regularly after acquisition. In the same survey of 1,500 property owners 69% did not know that cost of building and value are different. Knowing the Value of the property provides information for loan-to-value ratio needed in negotiations and reconciliations during transactions. Due to changes of economic factors that in turn affect the property market, property owners and financial institutions ought to have regular property valuations at least once a year.

Ladies and gentlemen
The Valuation Chapter of SIZ is in the process to developing Zambian Valuation Practicing Standards which will be in conformity with the Royal Institution of Chartered Surveyors (RICS) and take into consideration Zambian Laws and uniqueness of our property market. This will improve the services being provided to financial institutions and the public at large. In line with Part IX, Section 55 of the Bank of Zambia Act No. 43 of 1996 and Section 78 of the Banking and Financial Services Act of 1994, as amended in 2000, Bank Supervision Department of Bank of Zambia is responsible for licensing, undertaking prudential supervision and regulation of banks, so as to promote safe, sound and efficient operation and development of the financial system. Therefore, we urge Bank of Zambia to issue guidelines on how Banks and financial institutions engaged or empanel Valuation Surveyors to bring harmony to the sector and growth of our profession.

Fellow Valuation Surveyors
There is an increase in demand globally for efficient, innovative and reliable valuation services. In-order for us to improve our profession we need to improve our services by investing in robust market research, modern technology and spread our services to Capital Markets and Securities. This is only possible when we are coordinated in the way clients engage us and how we conduct ourselves. It’s time we implement standards that will promote our profession and ensure that our clients get quality world class results. Let’s do the right thing today for a better tomorrow.
Ladies and gentlemen
In conclusion, I wish to thank Bank of Zambia, Bank Supervision department in particular which has supported the development of the Valuation Profession in Zambia.
It is now my singular honor and privilege to call upon Dr. Bwalya Ng’andu, Bank of Zambia Deputy Governor Operations to address us.
Dr. Ng’andu, Sir!


Honorable Minister
Other Government Officials
Invited Guests
Surveyors Institute of Zambia Council members
Fellow Valuation Surveyors
Ladies and gentlemen

Good morning, I welcome you all to this Business Breakfast for the Valuation Chapter of Surveyors Institute of Zambia. Allow me to extend my gratitude to the Guest of Honor, Honorable Yamfwa Mukanga, who has taken time off from his busy schedule to come and be part of this breakfast.
Ladies and gentlemen
The Valuation Chapter of Surveyors Institute of Zambia aims:
– to protect the public interest by ensuring that its members observe the highest standards of professional and ethical conduct;
– to ensure that students of the profession acquire the knowledge, skills and values they need to become members of the profession, and that members maintain and develop that knowledge, skills and values throughout their professional careers
– above all to raise awareness on a broad range of skilled services that professional Valuation Surveyors can provide;

Honorable Minister
Ladies and gentlemen

Valuation Surveyors are trained in the art and science of interpreting, directing and supervising interests in landed properties with the sole aim of obtaining optimum returns for the owners of such properties and overall development of the Nation at large.

Valuation Surveyors roles include
– Property Valuation
– Management & Maintenance of infrastructures/assets
– Custodians of land and landed properties
– Land dispute arbitrators
– Property development consultancy
– Educators and instructors
– Employers of labour
– Act as land economists for infrastructural development schemes

Honorable Minister
Ladies and gentlemen

Infrastructure such as electricity, communication, water, airports, roads, rail, schools and hospitals provide essential services that drive economic growth, employment and productivity. This is why Valuation Surveyors take an active interest in reviewing both current and planned infrastructure projects within different markets of our country. The Valuation Chapter of Surveyors Institute of Zambia saw it fit to have this breakfast with the theme “The Importance of Infrastructure to the Property Market”. The rapid infrastructure development being experienced in Zambia is playing a pivotal role in establishing a significant influence on property development taking shape across the nation. We need to stop thinking about infrastructure as an economic stimulant and start thinking about it as a strategy. Strategic investment in infrastructure produces a foundation for long-term growth.
Fellow Valuation Surveyors
Always remember, “Professionalism is knowing how to do it, when to it, and doing it”. The importance of high standards of professional and ethical conduct cannot be overemphasized. For us to build a profession to last we must invest in what will fuel us for generations to come. The public needs our services, Zambia needs us more than before. It is time we move to greater heights with strategic alliances and synergies within and outside that will develop our country.
Ladies and gentlemen
In conclusion, I wish to thank the government for continued support in the development of the Valuation Profession in Zambia.
It is now my singular honor and privilege to call upon Honorable Yamfwa Mukanga, Minister of Works and Supply to address us.
Honorable Minister, Sir!


“The General Public urged to engage the services of qualified Valuation Surveyors”

The Valuation Chapter of Surveyors Institute of Zambia would like to urge the general public to engage the services of qualified Valuation Surveyors before making commitments in property transactions to avoid loss and unnecessary complications.
As required by the Property Transfer Tax Act Chapter 340 of the Laws of Zambia, sellers should pay a percentage of the Market Value of Land & Improvements. Market Value is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”. Effective 1st January, 2016 Property Transfer Tax is 5% reduced from 10%.
In order for players in the property market to pay the correct Property Transfer Tax they should engage the services of qualified Registered Valuation Surveyors in accordance with the Valuation Surveyors Act Chapter 207 of the Laws of Zambia. Valuation Surveyors are trained in the art and science of property valuation to help buyers and sellers of properties for their interests and overall development of the nation at large. Valuation Surveyors provide a broad range of skilled services including identification, negotiation of price and completion of sale of property. Members of the public should always ask for a valid practicing certificate.
The Valuation Chapter of Surveyors Institute of Zambia promotes highest standards of professional and ethical conduct of Valuation Surveyors.

Book Review in Zambia Daily Mail – 10/03/15

Title: Property and You
Author: Chisebwe Fumbeshi
Publishers: Fairworld Properties Limited
Pages: 290
Price: K150

‘REAL estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth,” says Robert Kiyosaki, who has been featured in the must-read book.
A good number of people are investing in property because it has been seen as the only investment which normally appreciates with time, allows the owner to have a profitable cash flow and tends to act as a retirement plan, especially when rental plans are involved.
Mr Chisebwe Fumbeshi, a registered valuation surveyor, provides a guide on how to become a property investor by outlining practical challenges faced in everyday life and uses common strategies to show how to overcome them.
In his book, Property and You, Mr Fumbeshi gives insights on how to develop the ‘property investor in you’ by outlining five steps, which are property knowledge, right attitude towards property investment, networking, understanding investment goals and, finally, developing a smart action plan.
In the first step of investing in property, the author provides hints on the appropriate information that an investor ought to have. He tackles the basic concepts of real estate, its different characteristics and reasons for promoting property investment.
Property investment is said to be easy and can be applied by anyone – rich or poor – but the commodity involved has peculiar characteristics: physical, economic and legal ones.
The author quickly explains two vital components of property investment, which are value and cost. Value is more subjective and appreciates as a community grows while the cost is what is paid to build or acquire a piece of property.
However, the first step is more academic and requires one to be alert to understand the real estate language, which in turn becomes helpful in understanding the other four steps.
The second step focuses on having the right attitude towards investment, which the author refers to as dreaming. Mr Fumbeshi explains that people fail to invest in property because they fail to dream.
Investing in property requires one to have the main goal – making a profit – and specific goals, which can then turn the dream into tangible reality.
He further goes on to talk about time management, which is vital as Property and You is about making money. However, time does not always automatically translate into money.
Effective time management is the cornerstone of having a successful working life, which in this case is managing a successful property investment that can generate a healthy cash flow.
Wealth generation is a primary goal of property investment – the more property one acquires, the more wealth one generates. The author is also quick to encourage readers that failure is part of success as it is a greater teacher and gives multiple avenues and ways to succeed.
Developing a network support of experts is the third step for property investors. Here, the author refers to property investors as linkers. This is because they should link up with other players or experts in the real estate industry for information and skills, which then should be incorporated into one’s suitable programme.
Mr Fumbeshi, however, encourages potential investors to become real estate experts by outlining a number of steps to be followed.
Interaction with other experts enables one to know the market trends – when to buy and sell – and the nitty-gritties of property legalities.
He names such experts as the real estate agents, valuation surveyors, architects, quantity surveyors, land surveyors, salespersons, auctioneers, property managers, business brokers, buyers’ agents, stock and station agents and building surveyors.
On the other hand, Mr Fumbeshi tackles the dangers of being a lone investor such as lack of planning, overnight millionaire syndrome, risk of increased costs, misjudging cash flow and reduced options.
The author also talks about an investor being an adjuster in the fourth step, where one ought to know the desired outcome for one’s investment and adjust one’s actions accordingly. He advises investors to set specific goals, which are time-bound, to make maximum profit.
Mr Fumbeshi warns that managing a property is a full-time job and, hence gives two options of either investors managing their property or contracting the help of a professional manager. He goes on to provide the pros and cons of both kinds of management.
And the author discusses the fifth step, where he describes investors as pursuers as this is where the SMART action plan ought to be achieved. He encourages the need to pursue the set goals no matter the discouragements or frustrations as knowledge and zeal alone are not enough for property investment.
Mr Fumbeshi says one becomes a business person the moment one invests in property. Hence, one should always work on maximising revenue whilst decreasing on expenditure.
The last chapter of the book gives hints on how to become a successful property investor, which is more like a summary of the whole book, Property and You.
And a reader, Mwansa Kaunda, wrote on the author’s Facebook page: “It’s simply splendid! I got one from Apple, it’s very educating. It kind of makes you long for more! Hey, thanks I took precautions in acquiring my newest property.”
Another reader, Diego Casilli, a property investor with investments in Zambia, said when it is obvious that the goals cannot be reached, do not adjust the goals, adjust the action steps.
“Many people talk about property investment. Many will take steps to invest and Property and You will be a guide that will be used for many years to provide step-by-step action.”
Mr Fumbeshi, born and raised in Ndola, obtained his bachelor’s degree in land economy from the Copperbelt University and is a full member of the Surveyors Institute of Zambia as well as Zambia Institute of Estate Agents.
The author, who is married to Nkhonde and has three children, is a chairman as well as chief executive officer of Fairworld Properties Limited – a property valuation and advisory services company.

Joint home loans


“Many couples involve themselves into ‘joint home loans’. When a marriage is tension-free, this does have many advantages. But if tension starts appearing, the consequences can be disastrous.”- Chisebwe Fumbeshi, “Property & You: 5 Steps to Develop the Property Investor in You”

Pre-Order Now http://www.bookworldzambia.com/shop/other/property-pre-sale/

Renting Vs Buying


“Buying vs. renting is the one question which haunts every dweller. If you prefer to live in a prime area where property is very costly, you might prefer to keep renting and invest in a house in a suburban area for retirement.”

– Chisebwe Fumbeshi, “Property & You: 5 Steps to Develop the Property Investor in You”

Pre-Order Now http://www.bookworldzambia.com/shop/other/property-pre-sale/

Pre-Order “Property and You”


Buy Now @ 25% Discount

“Property and You: 5 Steps to Develop the property investor in you”, written by Chisebwe Fumbeshi of Fairworld Properties Limited in Zambia gives out the steps for success in property investment. The Book is for everyone thinking of property investment or already investing. It’s written in an informal style and is an easy, yet engaging read. Mindset and taking positive action are stand-out themes of this book.

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