Petronella Sibeene
29 April 2008
Windhoek — Estate agents in Namibia are feeling the pinch of depressed sales in the housing sector resulting from high interest rates and inflation that appear to have driven potential home buyers underground as the credit crunch takes its toll.
Not too keen to have her name mentioned, one estate agent confessed in an interview that the local housing sector never suffered such a cruel blow in terms of slow business, as is the case this year when sales are at a record low.
"I have been in this industry since 2005 and never have we experienced tough times as now," said the Windhoek-based estate agent.
She said the situation is gloomy for estate agents who solely depend on property sales to make a living.
"It is tough especially for those without a second job. The high interest rates have turned away prospective buyers of houses and we are in for it," she added.
"It's absolutely quiet. There is nothing happening. In fact, I can no longer make a living out of this," commented another estate agent who also refused to be identified.
Although the situation has not yet reached a point where jobs are threatened, the source says it would be inevitable in the long run if the current economic state prevails.
The source revealed that in 2007, she was able to sell at least seven houses during the first four months of the year but since January this year, she only sold one house.
"The industry is going down and only those with back-up systems (second job) can survive," she reiterated.
There are about 4000 estate agents registered countrywide.
Jerome Joseph, Director of Marketing at Joseph and Snyman (pty) Ltd, confirmed that the house market is very calm.
He explained that property or house sales with price tags of over N$800000 have gone down.
While some estate agents are facing a difficult time, business is booming for those who are letting houses.
According to Just Letting Property Rental and Management, there are so many property owners putting up their houses for rent.
The trend is equally attributed to high interest rates in repayment to the banks.
Just Letting explained to New Era that most house owners especially those in the upmarket segment have resorted to putting up their houses on rent in order to get money for loan repayments.
"For example, if a person pays N$8000 to the bank monthly, they put the house on rent for maybe N$7000 and only add a thousand," explained an estate agent from Just Letting Property Rental and Management.
The business also said it faces a challenge in finding property for rent below N$4000. That again points to how expensive property has become in the country, she explained.
A few weeks ago, the Bank of Namibia reported that the annual rate of inflation has increased moderately from 7.8 percent in January to 7.9 percent in February with the main drivers being food and soaring transport costs.
While demand for credit extension and vehicle sales are said to be subdued.
Growth in mortgage loans, which accounts for the bulk of private sector credit, decelerated from 27.7 percent to 12.6 percent.
In neighbouring South Africa, the Business Daily reported that up to 15000 estate agents could be out of business by the end of the year.
Industry experts have warned that non-stop interest rate hike is likely to reinforce the trend of a shrinking estate agency industry, and the number of registered estate agents could decline by between 15 percent and 20 percent this year.
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