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Property market improves in the second quarter of the year

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Property market improves in the second quarter of the year

The property market has generally seen an improvement in the second quarter of the year, with the residential segment performing better during this period than in the first quarter of the year.

According to the Monetary Policy Report availed recently by the Bank of Botswana (BoB), the residential rental property market’s good performance was due to good demand for sales and rentals for low-end properties despite the lockdown in the second quarter of the year.

However, the report notes that demand and supply for rentals and sales in the medium-end property segment decreased marginally during the period under review.

It is reported that the average price for residential properties sold in the second quarter of the year increased by 5.7 percent to P857, 989.

This is said to be indicative of the high value of properties traded in the quarter under review.

It is anticipated that the demand for lower-end, medium, and prime located residential housing will improve given the relative affordability of properties in these categories compared to those in the upper-end market.

While the residential segment has seen an improvement, the market for office space is said to be still weak due to increasing supply from completed construction developments such as the Botswana Unified Revenue Services (BURS building in the CBD.)

The Report states that Despite Covid-19 movement restrictions and the overall weak demand for office space, there was still some take-up for the office space, albeit limited.

This was done mostly by the government at the Gaborone CBD, with the government being the major consumer and some corporate entities.

With ongoing construction developments and those in the pipeline, especially in the capital city at the CBD, it is expected that the supply of office space will increase further.

It is feared this would exert more downward pressure on rentals, particularly in the decentralized office locations.

The other factor that could negatively affect the demand for office space is companies allowing their employees to work from home due to Covid-19.

With regards to the retail space, and similar to the previous quarter, the demand in this segment is said to have remained fair.

Supply of the retail space is expected to increase further due to the development of a major shopping centre in the CBD and the proposed one in Mogoditshane.

Furthermore, areas like Jwaneng, Maun, Francistown, Mahalapye, and Palapye are believed to have good demand for retail space.

This is because these places have a few retail schemes at the planning and construction stages.

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