THE National Housing Enterprise (NHE) and FNB Namibia have signed a partnership agreement committing themselves to providing affordable homes and financing respectively to support low-income earners to acquire housing and leverage on these assets to create wealth for them.
The agreement, signed on Monday, states that NHE will provide the infrastructure finance and FNB Namibia the end user finance. Both parties have agreed to commence with the Otjimuise development project and expressed the hope that that this would be the first of many successful projects stemming from this relationship.
“Namibia is faced with an acute shortage of housing which is the result of almost a decade of inadequate land delivery. Currently, the housing backlog is estimated to be some 105,000 houses in Namibia as a result of the economy not being able to supply demand,” FNB Namibia chief executive officer Ian Leyenaar said.
“Further, the shortage of land and lack of serviced erven has forced up the price of land beyond where most Namibians can afford to buy property,” he said.
FNB Namibia therefore saw it as a necessity to work with Government in order to find creative and sustainable ways to allow the majority of people to purchase property.
Leyenaar said five years ago, over 60% of the houses financed by the banking sector cost less than N$400 000. Today, only a small percentage of properties financed by the banking sector are below the value of N$400 000.
“The point we are trying to make is that there is a fundamental dilemma with the current housing mix as it excludes lower income households from participating in the formal housing market. One way to address this challenge is to go back to basics, make land available and build hundreds and thousands of affordable houses.
The volumes alone should generate sufficient economies of scale to further reduce building costs thereby reducing the selling costs of houses,” Leyenaar said.