African Property Limited Chief Executive Officer, Sultan Mundeme said the order by President John Magufuli cannot be questioned because it is backed by the country’s laws.
Mundeme said use of the local currency will also assist to prop up value of the shilling because pressure from foreign hard currencies will be eased.
While acknowledging that quoting in US dollars was more beneficial to developers than property purchasers and tenants in high end markets but was negatively impacting the local currency and economy.
“In my opinion quoting in shilling won’t be a threat to the sector as developers would fix their prices according to the prevailing exchange rate of a particular time. A threat would be felt if the government could impose fixed rental and purchasing prices,” the property guru who is also lecturer at Ardhi University, noted.
He advised developers to hire professional real estate counselors to help them in understand the real market situation and prevailing conditions on the ground so that they can have their property prices fixed for a particular period such as on quarterly basis.
Watumishi Housing Company (WHC) Senior Marketing and Sales Officer, Raphael Mwabuponde said as a public entity, they have always quoted their property in shillings.
“Since WHC came into business in 2013, we sell our property in shillings and quote in shillings as our initial target was to serve public servants who are paid their wages in shillings,” Mwabuponde pointed out.
He added, “The President’s warning on dollarization sounds healthier to the nation’s economy and strengthening of the local currency as it has been under pressure from hard currencies due to demand.”
Most developers argued that they are forced to quote in US dollars due to the stability of hard currency compared to the local shilling. They argued that much of the construction materials being used are imported hence paid for in dollars which necessitates a similar charging in return.
National Housing Corporation (NHC) which is a public company which has been using US dollars widely, has also succumbed to President Magufuli’s order which took effect on January 1, 2018.
Last month, the head of state accused NHC management of violating the country’s legal tender by quoting its property in US dollars. NHC Head of Corporate Affairs, Susan Omari told Property Watch that the President’s order has been obeyed.
“The President’s order is without doubt accepted. NHC have been quoting in US dollar but a client is allowed to pay in shilling based on the prevailing exchange rate,” Omari said.
Last December while launching NHC Iyombe satellite city project in Dodoma, President Magufuli criticized NHC management under suspended Director General, Nehemia Mchechu for having its properties sold and leased in dollar which denied the majority Tanzanians access to decent housing.