Zambia real estate: Five trends and opportunities unveiled

Inutu Zaloumis, owner and managing director of Pam Golding Properties Zambia

Interview with Inutu Zaloumis

Lives in: Lusaka, Zambia

How we made it in Africa recently spoke to Inutu Zaloumis, owner and managing director of Pam Golding Properties Zambia, about the country’s real estate trends and opportunities. Here are the main takeaways from the conversation.

1. Middle-income residential market one of the most promising segments

Lusaka’s residential real estate landscape comprises two distinct markets: one catering to permanent Zambian residents with properties priced in the local kwacha currency, and another targeting expatriates, who typically pay in US dollars. High mortgage interest rates, ranging from 16.5% to 23%, have given rise to a robust self-build market, according to Zaloumis. Zambians often purchase plots of land and gradually construct their homes over a five to seven-year period. During this time, they reside in rental properties, bolstering the rental market.

Zaloumis sees potential in developing gated communities that offer serviced land plots, complete with water and power infrastructure, catering to the middle-income self-build market. These residential estates can be strategically positioned on the outskirts of the city, where land prices are more affordable. “Culturally, Zambians love to build; that is what they do. So the residential land sales market is actually performing very well,” she notes.

While the local currency rental market remained stable throughout the Covid-19 pandemic, the expatriate segment, which primarily focuses on upscale areas in Lusaka, experienced a downturn. Many expatriates left Zambia during the pandemic, and not all returned due to work-from-home arrangements. In many cases, those who did come back had lower housing budgets, leading to a decreased demand for high-end properties. Even some embassies downscaled their operations. Zaloumis notes that an oversupply of housing stock catering to the expatriate market already existed prior to the pandemic.

Regarding residential property sales, property valuations have stayed relatively flat in recent years, as incomes came under pressure. Developers who priced their properties in US dollars have also experienced challenges due to the depreciation of the kwacha, which has lost approximately half of its value against the greenback over the past five years.

2. Livingstone: An emerging hotspot for retirement properties

Pam Golding has noted a surge in property inquiries for Livingstone, a southwestern Zambian town located near the Zambezi River, adjacent to the Zimbabwe border, and serving as a gateway to the renowned Victoria Falls. Zaloumis attributes the rising interest primarily to foreigners from abroad searching for retirement properties. She points out the strategic advantages of Livingstone, such as the presence of an international airport and its relative proximity to South Africa, which is beneficial for those seeking medical care.

3. Zambians abroad investing in local property

Zaloumis highlights strong interest among Zambians working abroad to invest in local real estate, primarily with the goal of eventually retiring back home. These individuals often develop rental properties while residing overseas and frequently return home to manage their building projects. Additionally, some are interested in purchasing completed properties.

4. Potential in student accommodation

Student accommodation presents a promising opportunity, given Zambia’s youthful population with a median age of around 17 years. The recent introduction of free primary and secondary schooling in the country is expected to increase the demand for tertiary education for the foreseeable future.

5. Industrial and retail property under pressure

Warehousing and other industrial properties have struggled in recent years, with tens of thousands of square metres of vacant space available on the market. Zaloumis attributes the excess vacant space to significant market speculation. For example, Zambia’s Food Reserve Agency (FRA) – which purpose is to ensure the country has sufficient food during times of need – used to lease a substantial amount of warehouse space in Lusaka to store grain. Many speculative developers constructed warehouse spaces hoping to secure contracts with the FRA. However, in an effort to reduce costs, the FRA decided to relocate its storage facilities closer to the farmers in rural areas, leaving numerous warehouses in the Lusaka area unoccupied.

Zaloumis notes that the most successful industrial properties are those that are owner-occupied or purpose-built facilities, where companies rent industrial space specifically constructed to their specifications by professional developers.

Lusaka’s retail market has hit saturation, driven by a significant increase in shopping centre developments over the past decade. Zaloumis contends that the city is currently unable to accommodate additional large shopping malls. Nonetheless, there may still be potential for smaller convenience shopping centres in select areas and cities.

Pam Golding Properties Zambia managing director Inutu Zaloumis’s contact information

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