Property market seen slowing down
Lewanika Timothy | Monday May 18, 2026 06:00
The residential segment, which has seen growing valuations and rentals in the past years, particularly in the greater Gaborone area, is expected to experience a decline in pricing as developers may struggle to get affordable loans to buy or develop these properties.
A Bank of Botswana Monetary Policy Report on the performance of different asset classes released last week, also found that the pressure has been persistent since mid-last year, round about the same time when capital markets started feeling the pinch of a liquidity crunch in the market. The liquidity squeeze was mainly due to higher government borrowing, which has been driving up interest rates.
According to a Riberry Report, residential property market prices declined in the third quarter of 2025 compared to the second quarter.
“The average price for residential properties sold in the third quarter of 2025 was P888,055, a 9.9 percent decrease compared to the second quarter of 2025. The decline is attributable to lower average prices in Greater Francistown, Selebi Phikwe and Greater Gaborone,” researchers said.
The Monetary Policy Report’s observations on real estate, which are based on what independent property watchers like Ribbery Properties see in the market, noted that despite an expected softening in prices, demand was expected to continue being bullish, mainly driven by population growth of Greater Gaborone.
“However, the report highlights good demand for affordable prime located houses (rental prices up to P5,000 and purchase prices between P400,000 and P1 million), amid restricted supply. In contrast, the supply of medium-to upper-end market houses, for both sale and rental, increased in the third quarter of 2025,” researchers found.
The central bank said its first quarter 2026 Credit Conditions Survey Report indicated reduced demand for residential property loans, mainly due to higher pricing, reduced affordability and the government's decision to discontinue GEMVAS.
“For the months of March to May 2026, demand for residential property loans is expected to continue to decrease as higher pricing on new loans continues to constrain borrower appetite,” the bank further stated
The Financial Stability Council last year noted that residential real estate loans were stable between September 2024 and 2025 at P15 billion, remaining stuck at 25.1% of household credit and 16.1% of total credit. Despite rising demand for housing in Gaborone and its periphery areas, banks did not expand their mortgage books, a break from the double-digit growth that characterised the market a decade ago, which was an early sign of a slowing market.
Other segments, such as the retail market, were seen to be exhibiting sustained demand, particularly around Gaborone, with two regional shopping centres at Mogoditshane, one involving Kweneng District Council and private developers/investors, and the other being the A10 project by the GH Group, at the completion stage.