NGHIINOMENWA ERASTUS and LAZARUS AMUKESHEMATERIALS for building a three-bedroomed house cost about N$253 342. However, land and labour costs and speculation mercilessly hike the cost of owning a title deed.
In a recent findings report by First Capital Namibia, who track building costs over time, labour costs make up at least 35% of the cost of a new house.
In addition, serviced erven also come at a cost ranging between N$19 000 and N$80 800, sometimes more, depending on the town and suburb.
The total cost of building a three-bedroom house is between N$388 000 and N$600 000, said First Capital.
Earlier this week, The Namibian reported that houses ranging from N$500 000 and below account for more than 55% of houses financed by Namibian commercial banks in the last seven months ending April 2021.
The report estimates the building cost which includes the cost of building materials and labour, at the same time estimates the price of urban land using a standard three bedroomed residential house.
According to the findings, “housing-related budgetary allocations remain low to make a dent to the high housing backlog estimated at 300 000, amid low private sector investment to develop informal settlements”.
Narrowing the current housing gap trend remains a mammoth task even in the case of current policy targets, First Capital noted.
On average, building materials account for more than 60% of the total cost for building a new house.
A 12-month review on price changes of building materials indicates a broad-based steady prices trend, the study attributes it “to muted demand pressures for building materials”.
Cement prices remained flat posting a mild growth of 0,3% in March 2021 for the past 12 months.
After nearly half a decade-long freefall of cement prices, recent 12-month data suggests the setting in of a somewhat lacklustre positive price growth which could persist for the rest of the year given the absence of demand push factors of cement.
The government’s capital project spending remains a key factor in the demand for cement given their high cement consumption intensity; however, the recently tabled 2021/22 budget has a 14% cut on capital spending.
This would mean weak demand from the public sector while the compound effect of weak private sector investment made things worse.
The price of sand increased by 3,6% and 3,3% year-on-year for building and plastering sand, respectively, in March 2021.
The sand price inflation further extended the normalisation of sand price inflation from the 2019 record highs of 45% in the first quarter of 2019 when the enforcement of sand mining regulations triggered supply chain disruptions.
However, the current environmental enforcement measures pushing sand mining activities further away from end-user supply points mean transport cost is now a key factor in end-user sand prices.
The price of super bricks was 0,4% up in March 2021 compared to March 2020. The trend of brick prices continues to track that of cement, sand, and transportation costs which are key components in the bricks value chain.
The prices of electrical goods were 1,2% higher in March 2021 than in March 2020.
Given that Namibia imports most of its electrical building materials, the local exchange rate will be key to the price outlook.
The cost of building materials remains higher in the northern parts of the country compared to central and southern parts.
The bill of quantity for building materials on a three-bedroomed house using March 2021 prices recorded a combined average of N$254 302 at Katima Mulilo, Ondangwa and Rundu, while the same materials averaged N$252 692 at Keetmanshoop.
Windhoek and Swakopmund represent a variance of N$1 610 at the cost of building materials within these two geographic locations.
The total cost of building materials at Keetmanshoop is N$2 069 less than the cost of identical materials at Katima Mulilo.
The differences in building material cost by town reflects varying prices due to supply sources that are largely unique to every town.
The price per square metre of serviced land for each town is multiplied by the standard urban erven size of 375 square metres.
Among the towns surveyed, the cost of serviced land for an erf measuring 375 square metres is the cheapest at Keetmanshoop costing N$19 922 followed by Rundu costing N$29 574.
The highest is in Windhoek, as the same size of land would cost N$225 396 in a middle-class location of Khomasdal, followed by Swakopmund costing N$80 878.
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