30 January 2013

Namibia: 'People Hungry for Homes'

ONE in three families in Windhoek have to live in shacks because of the city's housing backlog and residents' struggle to afford homes of their own.

About 30 000 people working in the capital currently live in these conditions, FNB Namibia's manager for research and competitor intelligence, Namene Kalili, said yesterday.

The situation has deteriorated drastically since Independence when only 4% of Windhoek's residents had to call shacks their home. Twenty-two years later, about 33% of working Windhoekers have a shack roof over their heads, Kalili said.

It's not just Windhoek residents who suffer. In urban centres throughout Namibia, about 110 000 income-earning households have to live in informal settlements, Kalili said.

The capital's problem is a double-edged sword: the municipality can't deliver serviced land quickly enough and house prices in the city have skyrocketed. Median houses prices in Windhoek have catapulted 92% over the past five years, Kalili said - significantly higher than the Namibian average of 50%.

Windhoek needs 300 new houses a month to keep up with its growing population, he said.

Getting a house, though, is one thing. Being able to buy it, is another.

Windhoek's median house price, the price most commonly used to compare real estate prices in different markets, is N$720 000. But about 97% of buyers can't afford a house of more than N$400 000, Kalili said.

When FNB Namibia started tracking house prices in 2007, between 50% and 60% of houses on the market in Windhoek were selling for N$400 000, Kalili said. "Today it's difficult to get a house under N$1 million."

According to FNB Namibia's latest available data, the median price for a small house in central Namibia last September was N$247 167. The median price for a medium-sized house was N$582 667, and about N$1,3 million for a large house.

House prices in central Namibia have escalated by 38% over the past year, Kalili said.

The FNB House Price Index moved sideways in September, as more properties at Omeya, Elisenheim and Okahandja became available in the middle- to high-income market.

"Increased housing delivery has been concentrated in the middle- to upper-price segment which accounts for 7% of the housing backlog," Kalili said.

However, this market is becoming "saturated", he said, adding that properties are taking a lot longer to sell, on average staying in the market for 104 days before eventually selling below the asking price.

"Therefore supply may begin to shift towards the lower price segment, where the bulk of the demand sits, resulting in relatively more stable house prices."

However, house hunters shouldn't expect relief soon. "Given the short run supply inelasticity of housing this transition could take up to three years," Kalili said.

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