Experts have punched holes in the Botswana Affordable Housing Market saying it is essentially non-existent given the fact that low to middle income prospective purchasers of houses have been shut out of the market as evidenced by the exponential increase in house prices.
Real Estate Institute of Botswana has warned that 31 years after the country’s first housing policy that was drafted in 1982, the dream of a decent home has become even more elusive than ever for the country’s low income earners.
The policy meant to encourage the building of new urban housing for all income levels to avoid illegal settlement and to improve housing in rural areas has not been successful to deliver what experts calls ‘affordable housing’. Prospective buyers are said to be fatigued due to a sustained increase in property prices over the last few years.
“There has not being a corresponding increase in incomes. The Botswana Housing Corp which usually delivers bulk has also out-priced this group,” REIB President, Modiredi Maruping said at a roundtable organised by the First National Bank of Botswana to discuss ‘Affordable Housing’ in the country.
Available figures show that a Botswana Housing Corporation (BHC) low cost house in Gaborone currently costs around P700, 000 but was initially at P300, 000 in 2009 while in an inactive market like Lobatse the low cost house sells for above P400, 000. The Real Estate Institute of Botswana says that in all the areas where BHC is active it is the same scenario.
However the youthful REIB President said the property market is very thirsty for affordable housing saying the market is ripe and only players need to come to the fore.
“Government, commercial banks, private developers and pension funds need to start talking because affordable housing can only be affordable in the real sense if all players participate. We must have within our mist active supporters of affordable housing (advocacy group) whose aim will be to steer policy,” he said.
Property developers who attended the roundtable admitted that though there is huge demand for affordable housing, there is nowhere for this growing group of people to go when they want to stop renting and start buying homes. Like the poor who of late find themselves waiting to acquire a house through the President Housing appeal, potential gap market homeowners are said to be falling through the cracks.
The developers further revealed that there is clearly a growing number of people who cannot afford market-related bonds but who can raise capital of up to P150 000 to buy land.
“Such kind of people needs government help in the form of subsidy. The government can also subsidies property developers who in turn should sell houses to low income earners at a lower price,” one of the discussant at the roundtable noted.
Other goals outlined in the 1982 policy included gradual reduction of housing subsidies and redirecting them to middle and lower income housing to the rural areas, withdrawal of Government from construction of higher cost housing by strengthening the private sector to undertake this responsibility as well as encouragement to commercial bank and the Botswana Building Society (BBS) to lend money to lower income and rural households.
“Government can provide direct subsidies to specific projects that bridge financing gaps. We may innovate further and use government funds to leverage capital from philanthropic, community development financial institution and private sources. We may have a consortium of funders making loans to developers at favourable terms,” added Maruping.
Meanwhile the Ministry of Lands and Housing is reported to be currently looking at modalities of availing serviced land with private developers with a possibility of affording developers a piece of land for free or huge discount, who will then service the land and give back to Government a portion of serviced land to be allocated on an affordable basis to deserving locals. No commitment has however been communicated by government to that effect.
