Botswana's thriving property market

Category Investing in Botswana

Botswana's thriving property market

Botswana’s residential property market remains strong, amid healthy economic growth and political stability.

Because of the absence of official and timely house price statistics in Botswana, it is difficult to analyze the market. However, local real estate experts ascertain that house prices in the country have continued to rise in recent years.

According to the IPD Botswana Annual Property Consultative Index, the total return for all properties in Botswana stood at 17.9% in 2012 from 20.9% in 2011. For residential properties, total returns soared to 24.4% in 2012. The income return for residential properties was 8.8%, whilst the capital return was 14.4%.

The IPD Botswana Annual Property Consultative Index was launched in 2013 to measure ungeared total returns to directly held standing property investments from one open market valuation to the next. Accordingly, the index tracks the performance of 103 property investments, with a total capital value of BWP2.8 billion (US$322.4 million) in 2012.

Another indicator that demand remains strong is the increasing value of outstanding property loans. In January 2014, total outstanding property loans to households surged by 44% to BWP6.79 billion (US$782 million) from the same period last year, thanks to falling mortgage interest rates, based on figures from the Bank of Botswana.

In January 2014, the average mortgage interest rate by commercial and merchant banks fell to a record low of 8.99% from 10.87% in the same period last year.

Both demand and property values in Botswana are expected to continue rising this year, according to some local property experts.

The Botswana Government actively seeks out foreign investment and is happy to sell land to foreigners. Only tribal land and state land cannot be sold to foreigners, and in most areas of Gaborone (and indeed Botswana) land can be bought.
In the fourth quarter of 2013, Botswana’s economy expanded by 4.7% from the same period last year, after registering real GDP growth rates of 6.9% in Q3, 7.3% in Q2 and 4.8% in Q1 2013, based on figures from the country’s Central Statistics Office (CSO).

Botswana’s economy is projected to grow by a healthy 4.1% in 2014 and another 4.4% in 2015, according to the International Monetary Fund (IMF).

source: http://www.globalpropertyguide.com/

Author: Apex Properties