Swakopmund property market booming

THE property market in Namibia’s prime holiday destination, Swakopmund, is experiencing an ‘upper-class housing boom’, with prices fast exceeding Windhoek’s already expensive housing, estate agents at the town say.

According to Gert Maasdorp of the property department at Standard Bank at the town, the largest property developments currently underway there are for housing and light industrial buildings. He disagreed with some players in the local property market that house prices at Swakopmund are exceeding those of Windhoek’s upmarket accommodation, saying that prices are ‘more or less’ the same, but he acknowledged nonetheless that ‘to a certain extent’ prices are ‘very expensive when compared to Windhoek’. Be that as it may, estate agents at Swakopmund said the boom is mostly driven by foreigners. Despite the fact that many South Africans buying property there complain about the ‘outrageous’ prices, they are reported to continue buying at Swakopmund and farming areas in the Erongo Region.Other foreigners buying into that market are mostly from Angola, Germany, and Russia – and not so much the average Namibian. And, commented Welwitschia Estates principal Maureen Hoon, those who buy property these days, buy cash. ‘They do not have to take full housing loans, but it also means that there is no housing for the ordinary man on the street,’ said Hoon. Another estate agent spoke of a ‘walk-in client’ who was prepared to pay a staggering sum of N$10 million for property at the adjacent Long Beach, where property development is also taking place at a frenetic pace. Despite the fact that erven are becoming smaller, the price of housing at the town is on a continuously upward scale despite the occasional dips, and Maasdorp predicted that the blistering property growth will continue because of foreign investors’ input in the market. An estate agent preferring anonymity commented that the Namibian housing sector has not been adversely affected like the South African property sector, where prices have collapsed due to the recession since 2008.’In South Africa, builders and developers are going down the drain,’ said the agent. Housing development in the lower-income suburbs Tamariskia and Mondesa have remained stagnant for the most part. One recent development at Tamariskia is the Dante Square complex where two-bedroom apartments are sold for N$500 000, affordable for the lower-middle income group. Hoon said apartments in the centre of Swakopmund do not sell for less than N$2 million because of the exorbitant price of land that is becoming scarce. Those not in the centre of town range from N$1,3 million upwards. Some estate agents said a standard three-bedroom house in the upmarket parts of town sell at no less than N$1,7 million. The prices of plots outside Swakopmund have also skyrocketed. A block development close to Mile 4, which has for all intents and purposes been integrated into Swakopmund, now sells at N$350 000 per plot. Plots at a planned retirement village are also being sold from N$350 000, and plots in the newly established Extension 9 were all sold out at no less than N$380 000. Hoon said many of the plots are being bought by construction companies, which develop the properties and resell those at exorbitant prices. New properties in the town will be auctioned off in April, and, like in Windhoek, these erven are likely to be bought by private developers instead of first-time buyers due to the loopholes in the system. ‘There is an element of speculation,’ ventured Hoon. But what is causing the mad rush for housing in Swakopmund, which is presumably one of the reasons for the unabated increase in housing prices? ‘It is a question of demand and supply,’ commented estate agent Daphne Swanepoel. ‘Land is becoming less while the people become more.’Another agent commented that while there are no ‘urgent sellers’, those that sell their property have ‘too high expectations’. Many of the foreigners buying into the feverish housing rush are said to make spur-of -the-moment decisions to acquire property in the town because of its aesthetics, and because ‘all roads lead to Swakopmund’ as a prime holiday resort. Locally, the price of housing is influenced by the high cost of serviced land and of building materials, the supply/demand variable because more people go to the town or the nearby coastal towns of Walvis Bay and Henties Bay – where property development is also booming – with increased mining activities along the coast. And then there is reportedly fierce competition from the 55 estate agents operating in the town. But Hoon said estate agents are not the ones driving up property prices. She said agents, as per the Namibia Estate Agent Board rules, charge seven per cent commission on property sold, plus 15 per cent Value Added Tax (VAT), which is paid over to the Receiver of Revenue. Wherever the fault lies, one thing is clear: ordinary Namibians who might have been dreaming of buying a house at the coast have clearly missed the boat.