Oversupply softens Gaborone's property market
Lewanika Timothy | Monday September 23, 2024 11:29
A property market update by Riberry, cited in the Bank of Botswana’s (BoB) latest household indebtedness report, noted a softening in the local property market during the first quarter of this year. The residential market, in particular, experienced increased vacancy rates with supply outpacing demand, overturning the trend seen throughout 2023.
“According to the latest (2024 Q1) Riberry Report, the residential rental market showed signs of deterioration in the first quarter of 2024, compared to the fourth quarter of 2023,” the BoB said, citing Riberry. “This is evident from the rising number of properties available for rent and declining house prices.”
The report continued: “There is an oversupply of upper-end properties, leading to a possible decrease in the rental prices of these houses.”
According to Riberry, the average price for residential properties sold in the first quarter of 2024 was P854,000, representing a four percent decrease from the previous quarter.
While the residential market fought with supply-demand tensions, the office space sector remained flat with few property developments coming up. The trend is expected to keep supply low and demand high with time.
“The demand for office space remains reasonable and has improved slightly as government has occupied some vacant properties,” the BoB quoted the Riberry report as saying. “Despite the slower pace, there continues to be reasonable interest in office space within the Central Business District, Showgrounds, and Government Enclave. “In addition, there is limited construction of office space, which will most likely lead to excess demand for the same.”
A report issued last year by the country’s largest bank by balance sheet, First National Bank Botswana, noted a strong boom in the property market for 2023, with high demand throughout the year.
“Recent observations indicate a general upswing in rental rates across the country, reflecting a broader trend in the real estate market,” FNBB researchers stated at the time. “Various factors contribute to this phenomenon, including increased demand for rental properties, changing economic conditions, and evolving housing preferences.” The FNBB report indicated that during 2023, demand for housing continued to outstrip supply, especially in major urban hubs, exerting pressure on prices.
The disparity between supply and demand was anticipated to “persist in the short to medium term, bolstering price appreciation”, a prediction which however has not held correct in Gaborone for the first quarter of 2024, according to Riberry.