Gaborone homeowners push borrowing limits :: Mmegi Online

Homeowners with properties in Gaborone are carrying mortgage debt equivalent to nearly 94% of their properties' value, leaving them with little room to absorb a fall in house prices as expensive loans and a slowing economy weigh on the residential market, BusinessWeek has established.

The Bank of Botswana’s latest Household Indebtedness Survey shows that the local property market average loan-to-value ratio rose from 86.2% in the previous survey to 93.7%. The increase comes against signs of a softening residential property market and higher borrowing costs, which could place homeowners under greater financial pressure.

At the latest ratio, property owners in Gaborone with a home valued at P1 million are about P937,000 in mortgage debt, leaving P63,000 in homeowner equity. Any decline in the property’s value could quickly erode that difference, potentially leaving the owner owing more than the home could fetch if sold in the market.

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Gaborone homeowners push borrowing limits

Homeowners with properties in Gaborone are carrying mortgage debt equivalent to nearly 94% of their properties' value, leaving them with little room to absorb a fall in house prices as expensive loans and a slowing economy weigh on the residential market, BusinessWeek has established.

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