BHC hikes rentals next April
Rentals for low cost to jump 300% Increases for individuals to be phased Increase first in 16 years
The rentals for Botswana Housing Corporation (BHC) properties will go up from next April, in some cases increasing three times from their current levels in the first increase the parastatal has made in 16 years.
On Thursday, the Corporation said government had approved its request to increase rentals from next year in order to meet market rates. In previous years, the BHC has tried and failed to secure rental reviews, a situation that has affected its operations.
For individuals, rentals will be done in phases over five years, while for parastatals, government and companies, the increases will be done at once starting from next April.
The revision will see a low cost range from P537 to P2, 050 per month, medium cost from P1,330 to P3,700 per month, high cost from P2, 162 to P5,200 per month, town houses from P1, 866 to P5,020, and flats from P1, 238 to P3,500.
BHC CEO, Reginald Motswaiso told journalists the Corporation had approached government to increase rentals after realising that the current rates were not making any economic sense.
“We have taken into consideration many factors including macroeconomics, profiled
our tenants and come to the conclusion that the decision is appropriate and makes economic sense,” he said.
The increase comes as many Batswana are battling with the effects of COVID-19 on their disposable incomes. In addition, fuel prices, postal tariffs and fuel prices were increased recently, while Value Added Tax is set to increase next year from 12% to a possible 14%.
Government takes up the largest chunk of the BHC’s rental portfolio occupying 52% of assets, followed by individuals with 32%, parastatals with six percent and other companies with five percent. “We have come from a time when our rental income would account for 90% of income and that has come down to 40%,” Motswaiso said.
“It is high time our tenants pay in line with the market rentals because we have also realised that the low rentals are enticing our tenants to sublet.” Motswaiso said the low rentals were making citizen ownership empowerment initiatives, especially those targetted at sitting tenants, unsuccessful. “Mortgage repayments in the market are almost five times higher than the monthly rental,” he said. According to its latest data, BHC’s vacancies are at 1.8 percent while the rate of rental arrears is around 10%.