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Residential Market Remains Weak

PAULINE DIKUELO
No more appetite for residential property
Appetite for residential houses in areas around Gaborone has declined in the first quarter of 2018 with prices ranging between 10 to 20% lower than the valuations.

According to the latest Monetary Policy report, residential property sales in areas adjacent to Gaborone such as Mogoditshane, Gabane, Oodi and Modipane has showed weaker demand.

“Overall the average price for residential property sold in the first quarter of 2018 decreased by 2.5 percent to P765, 000 compared to the previous quarter,” read the report

However, it stated that residential property for the lower-end and medium cost has good demand and supply compared to the weaker higher-end residential housing.

Pressure on Gaborone’s office market has also been tightening as the coming on stream of new buildings weakened the demand for secondary space.

“The office space market has also remained weak due to the increasing supply from the completed construction developments at the Central Business District (CBD) and slow take up of office space.”

The report further anticipated a likelihood of improvement in the supply for office space going forward, given the ongoing construction projects at CBD.

The report stated that the demand for retail space remains fair across all market segments, with two proposed major shopping centres in the

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CBD and Mogoditshane.

In addition, other centres with good demand for retail space are Maun, Francistown and Mahalapye. According to the report, with regard to industrial property, the supply of vacant bigger demand has improved and that looking ahead, the demand for prime location industrial space is expected to improve further.

According to the 2017 report, compiled by real estate experts Knight Frank , while the growth of office and residential market appears to be moderating, Knight Franks says the industrial property market seems to be stable with the demand for industrial space focused on units of less than 500 square metres, as tenants have started to use newly built business space as cheaper quasi-offices or showrooms.

“The lack of strict planning controls within industrial areas has enabled this trend. For new warehouses under 200 square metres, rents are now as high as 50 pula/square metre a month, close to half the level of fully-fledged offices.

Demand for larger space is dominated by quasi-retailers seeking prominent properties with good visitor parking,” said Knight Frank.



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