LOW-cost houses (N$500 000 and less) are on demand in the country – taking up 56% of the 2 435 residential mortgages granted by local banks from January to April this year, the Bank of Namibia statistics updates show.
The above figures paint a picture of a housing market in Namibia that has a huge demand for low-cost houses, as opposed to the available properties priced above N$1 million. It also shows that many individuals with low-cost houses are taking mortgages to improve their properties and cash in from the appreciation of value.
Last year, reported that analysts’ calculations showed that the average cost of a house in Namibia was just over N$1 million.
However, this average cost is too bloated by land cost and property developers’ expenses, which are driving property prices insanely high.
According to the data from the central bank, 1 366 buyers took up mortgages in the N$500 000 and less price category.
This number, however, decreases as the mortgage value increases. For instance, 646 buyers took mortgages in the N$500 000-N$1 million price category, while 204 buyers took mortgages in the N$1 million-N$1,5 million price range.
Only 184 buyers took up mortgages worth over N$1,5 million and 64 buyers fell in the rather elite club of mortgages valued above N$3 million.
Several analysts and the International Monetary Fund have often noted that the Namibian property market is inflated and prices over the years started cooling.
The market also saw growing interest by property developers in less developed towns as far as Opuwo and Oshikuku.
Data from the central bank show that commercial banks at the end of April had a residential loan book worth N$42 billion and earn above N$250 million interest from these loans every month.
The banks too are largely exposed to this market and deal with defaulting borrowers daily. At the end of April this year, at least N$6,7 billion was in the red, with a large portion of this relating to mortgages.
Email: lazarus@namibian.com.na
Twitter: @Lasarus_A
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