Dar es Salaam. The Covid-19 pandemic has affected every sector of the economy in Tanzania, as a result real estate has not been spared.
In 2020 when the pandemic was at its peak, the market situation was not rosy as retrenchment, unemployment and financial shocks adversely impacted the performance of local markets.
Speaking to The Citizen at different times, experts in the real estate industry in the country expressed mixed opinions of the sector’s performance in 2021.
Some stakeholders were optimistic that the market would recover, while others think that the unknown status of Covid-19 in the country would continue to negatively impact the market.
“2020 was not an easy year, as most of our prominent buyers and targeted foreigners who came as experts for different development projects in Tanzania,” said Reginald Peter of DsmLink Tanzania Real Estate Agency.
He said the number of foreigners coming to Tanzania dropped in 2020 as many countries in Europe and America entered into lockdowns mode, and air transport was severely restricted.
Thus there was a flush in listings, demand was low and buyers had an upper hand not to mention most of the negotiating powers, according to him.
He said the real estate market expected a comeback from January 2021, but that has not been the case yet.
“The market is yet to come back to normalcy, since the country’s Covid-19 status is not known in terms of data to provide foreign players with enough confidence,” he said.
According to him, real estate, especially in prime locations, depends largely on experts from foreign countries, whose numbers has since dwindled due to the outbreak of the coronavirus.
“The government stopped reporting the numbers, so experts have been hesitating because they cannot acquire health insurance from their embassies,” said Mr Peter.
He added, “It’s a very complicated market now, but we are hopeful that in 2021 as the vaccines are already developed and being rolled out, the number of foreign clients would increase and the market will be better.”
The real estate agency is also looking forward to the months from June to December 2021, which is a peak season for the performance of real estate season’s market to comeback.
Zanzibar’s Ame Khatibu, an agent for RE/MAZ Real Estate Agency, said also the market hasn’t performed well in the Isles due to the decline in the number of tourists and foreigners.
“The market condition hasn’t returned to normalcy. However, we are optimistic that the situation will improve this year. As the economy is recovering, the number of tourists is also expected to increase,” he said.
Tabling the 2020/21 Budget in Parliament in Dodoma, the-then minister for Natural Resources and Tourism, Dr Hamis Kigwangalla, said the devastating impact of Covid-19 on the tourism industry would see the number of visitors to Tanzania dropping to a mere 437,000: equivalent to a 75 percent of the decline.
“The government has also been keen in attracting investment in the country, therefore increased number of foreign investors would also linger the number of foreign clients in the market,” said Mr Khatibu.
Despite the gloomy atmosphere, the tourism sector in Tanzania is currently rebounding, as major international airlines resumed flights to the country, offering a ray of hope for the industry.
The government reopened the country tourism in May, last year when it allowed flights and tourism to resume after a period of closure due to the pandemic.
International airlines including KLM Royal Dutch Airlines, Swiss Air and Emirates, which suspended their flights in mid-March, 2020 have now resumed operations to and from Tanzania.
Global real estate market
Many of the global experts are predicting another strong housing market in 2021.
From the US based real estate listings website they predict that in 2021 there would be a robust market performance that would turn around the swings experienced in 2020.
The Washington Post also reported that the market was expecting increased demand from buyers who delayed to purchase homes because of the pandemic; from existing homeowners who need larger spaces to accommodate parents working from home and children attending school virtually; and from condo owners who are seeking to escape multifamily buildings for single-family houses to mitigate exposure to the virus.
After the outbreak of new coronavirus disease, Reportlinker.com released a report titled ‘Real Estate Agency and Brokerage Global Market Report 2021: Covid-19 Impact and Recovery to 2030’ to assess the impact and forward looking in the real estate industry globally.
The report suggests that the real estate agency and brokerage market will recover from the shock across the forecast period.
This will be pushed by economic growth and a rapidly growing urban population.
Increased population is later expected to increase global demand for residential and commercial building brokers, during the forecast period. Also, increased number of rural-urban residents migration increases demands for access to affordable housing and commercial spaces.
This provides a significant opportunity for real estate service providers to improve housing, retail and other commercial services.