Low uptake of BHC�s sitting tenants campaign
Pauline Dikuelo | Friday January 29, 2016 15:27
The sitting tenants campaign was launched two years ago to promote home ownership among Batswana and to increase the corporation’s sales from old stock.
The campaign, which was supposed to come to an end last year, will be extended to the next financial year as the corporation feels that Batswana still need to be sensetised around the advantages of owning a house rather than renting it.
Under the campaign 1,528 houses: 1 354 low cost, 141 medium cost and 33 high cost were offered to existing tenants. Many of these houses are in Gaborone and Francistown.
“Some Batswana are highly indebted which becomes a challenge to the financial institutions on the money they can afford to give on mortgages,” said Tebogo Mmokele, the corporation’s communications manager.
“People also still need a lot of education about the advantages of owning a house versus renting.” Mmokele said most BHC tenants were approaching retirement ages, meaning that they might not qualify for long term mortgages.
“The campaign will be extended to the next financial year,” he added.
“The past financial year target was 141 and we are on course. We expect to sell 35 houses by end of March 2016 to achieve the target.”
When the campaign was extended last year, the deputy chief executive officer, Nkaelang Matenge, said the corporation had generated P43 million as at March, which was a 29 percent increase in sales of the old stock compared to the 2013/14 transactions.
On value proposition, low cost houses are given a 5.5 percent discount, medium cost 3.5 percent and high cost two percent. The corporation conducted periodic raffle draws for the campaign.
Customers could win between P10 000.00 and P5 000.00 quarterly prices and a P40 000.00 grand price at the end of the campaign. Chief executive officer of Vantage Properties, Sethebe Manake said the sitting tenant campaign should be structured differently as the difficult economic environment coupled the prevailing low bank rate made it difficult for potential buyers to acquire long-term loans.Manake said: “There are fears of job losses lingering over people and banks.
We hear it everyday where one company is retrenching, restructuring or shutting down.
There is also a genuine fear that with the bank rate being so low and new property loans being so priced so high, would people be able to sustain their repayments thereafter.
“The cost of living has increased while the working population are now also supplementing the lives of those who used to subsist on their cattle and crops due to the drought.
When all these things pile up, affordability becomes a different story.
“The sitting tenant scheme should be modelled differently, looking at the affordability of each tenant.
We know this can be done. The debt pricing issue is a little more complex and perhaps not the best route for sitting tenants.”