Why Housing Prices are soooo high: A Guide to Housing Prices
We know this question all too well, if you have ever wanted to invest in property, you can literally be discouraged by the prices you find on adverts across all advertising medium. Housing prices have become totally unreachable but understanding them may make your investment journey a little less turbulent. Buying a house is usually the largest purchase you will ever make. It can take anywhere from a few months to several years to save up a down payment, and most mortgages are financed for 15 to 30 years. Even seasoned real estate investors have not cracked the time needed from searching for a property to final transfer.
The average price of a house has changed dramatically over the last few decades. This trend is a result of many things and among others; changing economic factors, rising construction costs, and many other elements. Below we will outline historical shifts in housing prices and what factors have contributed to these changes. Keep reading to learn more about why houses are so expensive and how this could impact your home buying experience.
History Of Housing Prices
We went back to 2005 to establish the trends in housing prices, in Gaborone alone the Average Low Cost house was going at P 120 000 while the High Cost house was going at P 750 000. Since 2017 a low cost house has reached P 680 000 while high cost houses sell at above P 1. 2 Million.
Throughout the country housing prices have increased by over 200% with urban areas seeing the highest growth rates and speculative areas such us Gaborone, Palapye, Kasane, Maun seeing high levels of growth spurts cause by high anticipation of economic growth, from the SA hosted, anticipated impact of development of BIUST, and Tourism amongst others.
Unfortunately, average salaries and wages in Botswana have not risen at the same rate as home prices. According to Trading economics wages over the same period of time grew by 50% . This coupled with inflation, cost of living there is a growing disparity between the two.
source: tradingeconomics.com
This gap has left many people unable to purchase property, particularly in recent years. Although, there are many homeownership efforts aimed at combating this reality.
It is also interesting to note how home prices have grown at different rates regionally.
For example, the largest increase in the average price of a single-family home is in the South East peri urban areas went up by over 700%
Location reports are key to comparing prices between different areas. Ensuring that you know which areas you can buy your property in.
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