- Average price for residential properties 11% up to P800K
- Market for office space remains weaker due to COVID-19
- Construction developments at Gabs CBD to unlock growth
The property market has shown some signs of improvement in the first quarter of 2021, the Bank of Botswana (BoB) has noted in its latest Monetary Policy Statement
According to BoB, the latest (2021 Q1) Riberry Report shows that the residential rental market improved in the first quarter of 2021 compared to the fourth quarter of2020, thanks to a good rental market for the lower-end properties in terms of both a demand and supply.
“The average price for residential properties sold in the first quarter of 2021 increased by 11.1 percent to P800 000 compared to the previous quarter, reflecting the higher number of the high valued properties traded in the quarter under review,” BoB noted.
Looking ahead, the demand for the lower-end, medium and prime located residential housing is expected to improve further, given the affordability of properties in these categories compared to those in the upper-end market.
“The market for office space remains weak due to the increasing supply from completed construction developments, such as the Botswana Unified Revenue Service building at the Gaborone Central Business District (CBD),” the report said. “However, demand remains weak and uncertain due to COVID-19 and generally subdued business conditions.”
The report noted that despite the negative impact of the pandemic and generalised weak demand for office space, there has been continued good office enquiries and/or uptake in the CBD and Showgrounds.
Going forward, BoB said there is a possible likelihood for a slowdown in uptake at the CBD, especially due to COVID-19 and particularly if government institutions remain in their current premises and locations.
“In addition, the supply of office space is likely to increase further, given the ongoing construction projects and planned office buildings at the CBD, such as by the Botswana Housing and Water Utilities Corporations,” it noted. “These will further exert downward pressure on rentals, especially in the decentralised office locations.
“Furthermore, the outbreak of COVID-19 has resulted in most companies allowing their employees to work from home, and this could negatively affect the demand for office space. Similar to the previous quarter, the demand for retail space remains fair across all market segments.”
Other centres with good demand for retail space are Jwaneng, Lobatse, Selibe-Phikwe, Maun, Francistown, Mahalapye and Letlhakane. This is because most of these locations have a few retail schemes at planning or construction stage and are to be anchored by reputable supermarkets.
With regard to industrial property, BoB Botswana stated that the supply of unoccupied big warehouse space has decreased while demand has improved during period under review.