Reginald Motswaiso is a qualified chartered accountant and the big boss at Botswana Housing Corporation (BHC). This means when his number crunching makes for sweet music, bankers, property financiers, realtors and valuers have to put on their dancing shoes.
The BHC Chief Executive Officer has hit that high note with all his talk of unlocking value behind property investments, building Batswana’s net worth through property investments and making ordinary people appreciate the true value of homeownership.
Motswaiso is a man on a mission and the property market maybe in for a year-long party. In the next twelve months he wants to sell almost two thousand of BHC housing stock to sitting tenants. To detractors this is an ambition way off the rails. To this comptroller and his aides, the numbers are adding up.
“Our customers have proved to us that our products are in demand and rightfully placed. They have not, however lived to our slogan ÔÇô ‘accommodating your future.’”
To preface his marketing pitch, Motswaiso says the campaign is meant to wean Batswana away from the renting mode and foster them into ownership.
And he is not your run-off-the-mill bean counter, far from it. He is actually talking citizen empowerment and making all the right noises. Over and above low selling prices, the BHC boss is also offering generous discounts to tenants for every unit bought.
As if below the market prices were not good enough, a further incentive of close to P10 000 will be advanced to every purchaser so that they could undertake any renovations they may so wish immediately upon purchase.
For the BHC boss and his team, the offering is a deal made in heaven.
“The project provides for a collective empowerment program that will lend an impetus to Batswana owning their own homes and not perpetually renting from BHC.”
That alone is a change of heart that has taken decades to come about.
For years BHC has had to put up with accusations of condemning its tenants to near destitution by not converting years of rentals into ownership. For as long the Corporation has rubbed off such calls as unrealistic.
“You don’t become a hotel owner by paying for a hotel room over a long time. Renting is the same as staying in a room,’ says one of Motswaiso’s officers, Research Manager Mookodi Seisa.
While the Sitting Tenants Project does not in any way convert past rentals into ownership, it is the closest the parastatal has come to it thus far.
And as BHC management endlessly points out the selling prices are by any measure a giveaway that can only be resisted at the tenants’ peril.
Seisa compares the tenants’ position to sitting on gold – a deliberately crafted marketing analogy that is not altogether devoid of hyperbole.
There is no question that what the Corporation is doing has never happened before. And from comments by property market watchers, the decision by BHC had not been anticipated.
As the head of the country’s Real Estate Institute advised, for those who can afford to buy there are many benefits to it.
And the sooner they buy, the better it will be for them.
“Interest rates are currently very low, but they will not stay low forever,” he says.
Drawing comparisons from BHC’s now discontinued Tenant Purchase Scheme (TPS); Modiri Maruping says those who had ingenuity to buy at the time have in some instances seen the value of their property appreciate ten folds. “Those who bought under TPS were brilliant people,” he says as a matter of fact.
For all his bullishness, Maruping has also warned BHC not to expect a smooth sail.
Many of the properties that BHC has put up for sale are low cost units currently attracting monthly rentals as low as P600.
A good number of the tenants, he points out are people who have retired or about to.
Approaching a bank to buy some of these houses will overnight attract a mortgage repayment which will in some instances go as high as P4000 a month, bonded over as many years as twenty five years without the customary flexibilities associated with monthly rentals.
This he says will amount to a cultural shock that on its own might prove a potent enough disincentive.
Maruping adds that while market conditions cannot be more favourable with interests at their lowest in a very long time, still the financiers have a job to do to augment BHC’s below market asking rates.
He has called for innovation and creativity on the part of financiers.
Still more, he adds that there is a lot of training that BHC has to do.
An impression has been created that invariably, the value of property always goes up.
While this generally holds true, he insists it must always be approached with a pinch of caution.
“It is important to highlight to potential buyers that this is not always the case.”
Yet for other commentators the BHC decision is not only unprecedented, it also is clearly a leap into darkness.
There is consensus among property analysts and professionals that BHC is not selling these houses out of any newly found sense of benevolence.
Underlying the marketing pitch of good heartedness is stark warning messages that have consistently come from the shareholder that no more subventions will be forthcoming.
And more!
“There is a sub-text to the campaign,” says one property agent. “What BHC is not saying is that all these houses that they are selling are no longer wanted by the Corporation. It is mainly old stock that has weighed down heavily on their balance sheet,” he adds.
It is assertion that is only vaguely and somewhat reluctantly admitted by BHC management.
“We can afford to sell at these prices low prices because land was bought cheaper at a time when many of the houses were built,” says Deputy Chief Executive, Nkaelang Matenge.
Also not said is that almost the entire inventory put up for sale is low cost units.
Even then, that is only half the story. Other than the fact that BHC has already more than recouped investments from these houses through rentals in some cases going back as thirty years or more, a majority of them are now at the sunset of their lifespan, thus proving highly expensive to maintain.
“In all fairness the real value is on land. It is a bargain for those tenants who can afford to buy and then demolish the structures and put up new ones,” said a leading architect.
