Demand falls on rentals

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THE property market is currently faced with one of its lowest demands for rentals despite an upsurge in the construction industry.

Don Whayo who is MD of Knight Frank Malawi, explained to The Express that most buildings that are under construction, especially in Blantyre, are either for specific projects or for owner-occupation.

This will have little impact on the property management business which depends mainly on private or institutional property developments.

“Such investment would come from institutions such as pension funds, and this is the sort of investment that would positively impact the property market. But for this to happen, there would need to be considerable demand from the rental market,” he said.

Whayo however remained optimistic of business picking up following the recent reduction in the prime rate which resulted in signs of a rise in borrowings in the banking sector.

In 2017 the central bank reduced the policy rate – this is the rate at which commercial banks borrow from the central bank — from 24 percent in December 2016 to 16 percent by the end of 2017.

Some commercial banks responded by reducing their base lending rate to as low as 23 percent.

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