The Surveyors Institute of Malawi (SIM) has said players in the real estate sector will be affected differently by the recent 44 percent devaluation of the Kwacha.

     

    SIM President Desmond Namangale said landlords are likely to feel the pitch in the short-term because as the people buying power dwindles but may not raise rentals because they are using leases that already exist.

     

    He said land developers will also feel the pitch because prices of construction materials have gone up.

     

     

    “As much as these will be corrected by raising rentals, it will be unfortunate to increase the rentals by 44 percent because real estate is affected by location and it is what should determine the percentage of the raise,” he said.

     

    Since the devaluation, prices of different goods and services have been rising.

     

    Presenting the mid-year budget statement in Parliament, Minister of Finance Simplex Chithyola Banda said the policy shock to align the exchange rate was tough but important.

     

    After months of hesitation, the Reserve Bank of Malawi (RBM) recently announced a whopping 44 percent devaluation of the Kwacha, coming closer to the 49 percent slump effected by the Joyce Banda administration in May 2012.

     

    RBM said the devaluation stemmed from its assessment of the Kwacha, which showed that supply-demand imbalances remained in the market despite adjustments of the rate through the auction system.

     

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