Demand for real estate has jumped by 15 percent, especially for residential property largely due to the sector’s three years of moderate growth post-Covid-19, industry data shows.
Data provided by Knight Frank, a real estate consultancy firm, shows that the commercial real estate sector is also growing, particularly in retail and office spaces where rental rates for commercial properties increased by over 10 percent year-on-year.
The data comes at a time two Malawi Stock Exchange (MSE)-listed property firms Icon Properties plc and Mpico plc anticipate their net profits to grow in the first six months of this year.
In an interview on Monday, Knight Frank managing director Desmond Namangale, who also attributed the growth to favourable policies such as the amended land laws, said the local market has experienced moderate growth in the urban areas over the past three years.
He said: “With that, demand for residential properties has risen by about 15 percent, driven mainly by expatriates and local professionals seeking housing in cities such as Lilongwe and Blantyre.
“This trend suggests the emergence of a middle class with increased purchasing power, influencing buyer behaviours within the market. One noteworthy trend is the rise of short-term rentals, which has become increasingly popular among tourists and business travellers visiting Malawi.”
Icon Properties plc and Mpico plc expect their first-half profit to jump 33 and 40 percent respectively to K13 billion and K7.99 billion from K9.7 billion and K 5.7 billion in that order in a corresponding period last year.
In an interview on Monday, Icon properties board chairperson Eric Chapola said the profit growth projection reflects the strength of the portfolio, but added that low valuation of the share price to liquidity issues do not necessarily reflects fundamental financial performance of the company.
He said: “This performance is a reflection of the strength of our portfolio, prudent cost management and a continued focus on tenant satisfaction and operational efficiency despite a challenging economic environment.”
Meanwhile, equity investment analyst at Stockbrokers Malawi Limited Kondwani Makwakwa has said the stagnation of share prices for property firms is largely driven by low investor demand for property counters.
