It’s Inertia That Is Shocking
THAT Namibia’s house prices are the fourth most expensive in the world, after Hong Kong, Dubai and Brazil, should shock no one. The announcement this week by researcher Namene Kalili of First National Bank [FNB] only confirmed the worrying situation to whoever was doubting what their eyes were seeing.
What is shocking to a point of numbness is the inertia from authorities to take meaningful steps to reverse the trend.
For decades now, especially since independence, Namibia’s housing and similar property industry has become a haven for developers, the estate industry, speculators and their accompanying greedy cohorts [among them banks], but a nightmare for families and individuals whose only concern is to have a decent roof over their heads.
Last year alone the house prices in the country rose on average by more than 25 percent. The trend began many sunny days ago. Consider this introduction to a report in today’s The Namibian: “On 10 May 1990, a three-bedroom house in Windhoek’s Khomasdal area was advertised for N$84 800. In May 2005, a three bedroom house in the same area was valued at N$400 000. Five years later in 2010, a similar house in the same area was valued at N$650 000. Last year, however, the same house’s value nearly tripled to N$1.5 million. Today that figure has swelled further.”
Economists will tell you that Namibia’s property market, whether housing, office space or farming land has been a seller’s market – demand is so high and supply so low that that whoever lays their hands on a piece of land first is guaranteed to multiply several fold their returns on investment.
Last week, for instance, The Namibian reported about a N$40 million sale of 4 600 square metres of prime land in Windhoek’s central business district by the United Africa Group [UAG] to FNB. UAG bought 2,4 hectares of the land from the city in 2004 for N$10m, which the company has been paying off arrears until 2008 when the land was transferred. UAG has since subdivided the land into seven or nine other portions, which we can only assume they could be sold to the highest bidder too, calling into question what the municipality’s gain was.
Meanwhile, the city council constantly complains that it did not have money to service land, a factor that leads to scarcity of housing and thus drives prices to dizzying heights. Lack of serviced land is the excuse for lack of housing schemes throughout the country. But the people who suffer most are the low to middle income earners. Even with N$700 000 it is difficult to find decent houses in the country’s major towns these days.
Under these conditions, the government finds it difficult to budget for housing to the poor. The National Housing Enterprise, whose mandate is to provide housing to the poor and middle-income groups gets a paltry N$320 million over the next three years to catch up on a backlog of 105 000 houses for families while pet project draw billions of taxpayer money. As it is, far fewer than 5 000 new houses are put on the market every year. Last year, FNB estimates that mortgages were issued for 300.
The policy on providing land and housing seems outdated or inadequate as it feeds into the current trend of providing enough for the very rich who can amass property and next to nothing for the poor who need the security of tenure.
As matters stand action is urgently needed – policies for instance to make it difficult for the rich to auction the houses of the poor and increase serviced land as a means to drive down prices.
Namibia should perhaps even be as radical as mingling mass housing among neighbourhoods of the wealthy to force residents and municipality to put up worthy public amenities. That will discourage the “out-of-sight, out-of-mind” principle that continues to promote the separate and unequal discriminatory development of residential areas.
Of course, the monied people will complain about the scum of the earth lowering the “value” of their houses. But if good schools, roads and shopping centres spring up because there are wealthy people in the area, everyone including the poor will be uplifted and the municipality will be forced to keep its entire town clean and safe.
We know the problem/s. Action must follow.