Despite imminent plans to hike their rentals, Botswana Housing Corporation (BHC) does not fear a mass exodus from their properties.
As of April, BHC tenants will see their monthly rent more than doubled.
The new adjustments mean a low-cost BHC house will balloon from P537 to P2, 050 – an eye-watering 381 percent increase!
Medium cost accommodation will rise from P1, 330 to P3, 700, while monthly rentals for high-cost properties will become P5, 020, up from P1, 886.
Additionally, those living in BHC flats will have to fork out P3, 500 a month instead of the P1, 238 they are currently paying.
The price hikes are the start of BHC’s five-year mission to get their rentals on par with market rates – an ambition that was given the green light by the government back in December.
Speaking to Voice Money this week, BHC’s Acting Head of Marketing and Communications, Tebogo Mmokele insisted the spike in rentals was long overdue, with prices last adjusted in 2004.
“Operational costs, including that of maintenance, continue to rise while the rentals remained stagnant,” explained Mmokele, adding this ultimately distorted the property rental market.
As BHC relies on capital markets to fund its housing development projects, Mmokele noted the low yields act as a barrier for the Corporation to access funding in the open market for new developments.
Although the changes seem incredibly steep, Mmokele was at pains to point out the prices remain substantially cheaper than the market rate. For this reason, he is confident there will not be a mass exodus of clients seeking alternative accommodation come April when the new charges are implemented.
“The BHC individual rentals are still below the market rates. Therefore, it would not make sense for tenants to vacate their BHC rented houses with lower rentals for higher rentals in the market,” he reasoned.
BHC’s vacancy rate currently stands at 1.5 percent while rental arrears are at 10 percent.
OLD PRICE NEW PRICE
Low-Cost P537 P2, 050
Medium Cost P1, 330 P3, 700
High-Cost P1, 886 P5, 020
Flats P1, 238 P3, 500