In the heart of Southern Africa, Zimbabwe is experiencing a transformative phase in its real estate sector. With rapid urbanization, a growing population, and government-led initiatives to address housing shortages, residential development—particularly in the affordable housing segment—presents a compelling business case.
But is it truly viable? In this blog post, we’ll explore the current landscape, key challenges, emerging opportunities, and why savvy investors and developers are turning their attention to this market as of 2025.
The Current State of Housing in Zimbabwe
Zimbabwe’s housing market has long been plagued by a significant deficit. According to various reports, the country faces a backlog of over 2 million housing units, driven by population growth, rural-to-urban migration, and economic recovery efforts post-COVID-19. Urban centers like Harare, Bulawayo, and Marondera are seeing skyrocketing demand for decent, affordable homes.
The government has stepped in with policies aimed at bridging this gap. The National Housing Policy emphasizes integrated community development, including essentials like water, sanitation, electricity, and roads.
Initiatives such as the Infrastructure Development Bank of Zimbabwe (IDBZ) and the Ministry of National Housing and Social Amenities are funding and overseeing projects. For instance, recent completions include the Marondera Dombotombo Flats and the Beitbridge Housing Redevelopment Project, which provide modern walk-up apartments for health professionals and low-income families.
Despite economic headwinds like inflation (which stood at 175.8% in mid-2023 but has shown signs of stabilization by 2025) and currency fluctuations, the market is rebounding. Rental yields for residential properties hover between 6–8% annually, making it attractive for investors.
The Demand for Affordable Housing
Affordable housing isn’t just a social need—it’s a massive untapped market. With a young, urbanizing population (over 60% under 25 years old), there’s strong demand for low-cost options like cluster homes, townhouses, and modular units.
Diaspora remittances play a huge role, as many Zimbabweans abroad invest in property back home for retirement or rental income.
Trends in 2025 show a shift toward secure, gated communities and mixed-use developments that combine residential spaces with retail and amenities. Suburban areas around Harare, such as Highlands and along Chiremba Road, are booming with upscale yet affordable retail-integrated housing.
The rise of foreign-denominated mortgages and employer-assisted schemes further fuels this demand, making homeownership more accessible.
Innovative solutions like modular housing are gaining traction. Companies are exploring prefabricated, low-cost designs to reduce construction time and costs, addressing the needs of low-income earners while ensuring profitability.
Challenges in the Sector
No business opportunity is without hurdles. In Zimbabwe, key challenges include:
- Economic Instability: Parallel exchange rates and forward pricing by suppliers inflate construction costs, squeezing margins for developers.
- Regulatory Hurdles: Obtaining permissions from the Department of Physical Planning and local councils can be bureaucratic, though reforms are underway.
- Infrastructure Gaps: Many areas lack reliable utilities, increasing development expenses.
- Slow Uptake in CBDs: Central business districts see lower demand due to informal economic activity, pushing focus to suburbs and peri-urban lands.
However, these challenges are being mitigated through public-private partnerships and incentives like Special Economic Zones (SEZs), which offer tax breaks for property developments.
Opportunities and Viability as a Business
Despite the obstacles, residential development remains highly viable. The 2025 market analysis highlights emerging trends:
- Cluster Housing Boom: Secure, community-style developments yield high returns, with demand outpacing supply.
- Short-Term Rentals: Platforms like Airbnb are thriving, especially in tourist-friendly areas.
- Peri-Urban Land: Affordable plots on the outskirts offer capital growth potential as cities expand.
- Commercial-Residential Mix: Integrating shops and offices boosts rental income and property values.
Investors can expect solid returns through buy-to-let models or flipping developed properties. For example, WestProp Holdings is leading with lifestyle-focused projects in Harare, while the National Building Society (NBS) supports housing stock growth aligned with national goals.
With urban growth projected to continue, the sector could see values rise steadily, making it a smart long-term play.
Success stories abound: Developers like those behind the Eagle View Estate (though more Zambian-focused, similar models apply) and local firms are capitalizing on innovative, cost-effective building methods. For entrepreneurs, starting small with serviced stands or partnering with government funds can minimize risks while scaling up.
Conclusion: Building a Brighter Future
In summary, residential development and affordable housing in Zimbabwe are not just viable—they’re essential for economic growth and social stability. With government support, rising demand, and innovative approaches, this sector offers profitable avenues for businesses willing to navigate its complexities.
As the market evolves in 2025, focusing on quality, sustainability, and affordability will be key to success.
For those looking to enter or expand in this space, companies like Formulux can provide invaluable assistance.
As a trusted Zimbabwean construction firm with over 25 years of experience, Formulux specializes in structural engineering, civil works, and architectural designs. Having completed more than 50 projects nationwide, they ensure compliance with local regulations and deliver high-quality, cost-effective solutions tailored to affordable housing needs.
Whether you’re planning a new development or renovating existing structures, partnering with Formulux can streamline your project and enhance its viability.