Windhoek City Council moves in to curb land speculation

Windhoek City Council moves in to curb land speculation

SPECULATORS, eager to rake in quick money, are reportedly holding the property market at ransom by hoarding land and houses for resale.

Investigations by The Namibian revealed that the pattern had become rife over the last few months. In the process, the prices of houses and residential plots have more than doubled in just less than a year.The trend, most visible in Windhoek, is fast spreading to towns such as Swakopmund and Walvis Bay.In some cases, speculators are allegedly colluding and pushing prices at municipal auctions beyond the reach of the average person.In an earlier interview, Bennie Joseph, managing director of Joseph Snyman Estate Agents, said speculators were holding the market hostage by hoarding properties for resale.The City of Windhoek has acknowledged that individual buyers are being subjected to unfair competition by land developers, and says it is imperative to change the auction policy.Municipal spokesman Ndangi Katoma told a press conference on Friday that the Windhoek municipality has instituted new measures to curb unfair competition.One of these measures limits buyers to one erf per person during the first phase of the auction.This would give first-time buyers a chance to buy land on an instalment plan.During the second phase of the auction, bidders who can pay cash will be allowed to compete for additional erven that may only be bought during the second phase.”Further, no resale of properties is allowed as long as the property is registered in the name of the City,” Katoma said.Only recently, the Windhoek municipality auctioned 336 plots in terms of the new policy.There were 1 335 registered buyers, 1 053 of them classified as first-time buyers.The 336 plots were sold for a staggering N$59,78 million, although the reserve price was only N$13,27 million.On average, the plots fetched N$351 per square metre compared to a reserve price of N$78 per square metre.Five plots in Auasblick went for an astonishing N$608 per square metre.Seven plots in Cimbebasia were sold for a record N$359 per square metre, while in Khomasdal, 18 plots fetched N$220 per square metre.Katoma told the press conference that a report was being compiled so that the municipality’s management could evaluate the success of the new policy.Joseph told The Namibian that most houses in Windhoek and major towns in Namibia were grossly overvalued.Because of this, he said, activity on the property market had gone down 30 per cent compared to last year.”What we have seen over the months is growing resistance from buyers.Most people feel the properties are way overpriced,” said Joseph.As a result, many houses in Windhoek’s more expensive suburbs have been on the market for some time with no takers.Joseph said although borrowing was cheap at the moment, with interest rates hovering between 11 and 12 per cent, most buyers could not afford the escalating house prices.A survey showed that an ordinary three-bedroom house in the eastern suburbs of Eros and Klein Windhoek is now fetching about N$1.5 million.Last year, the same properties were selling for anything between N$800 000 and N$1 million.In the process, the prices of houses and residential plots have more than doubled in just less than a year.The trend, most visible in Windhoek, is fast spreading to towns such as Swakopmund and Walvis Bay.In some cases, speculators are allegedly colluding and pushing prices at municipal auctions beyond the reach of the average person.In an earlier interview, Bennie Joseph, managing director of Joseph Snyman Estate Agents, said speculators were holding the market hostage by hoarding properties for resale.The City of Windhoek has acknowledged that individual buyers are being subjected to unfair competition by land developers, and says it is imperative to change the auction policy.Municipal spokesman Ndangi Katoma told a press conference on Friday that the Windhoek municipality has instituted new measures to curb unfair competition.One of these measures limits buyers to one erf per person during the first phase of the auction.This would give first-time buyers a chance to buy land on an instalment plan.During the second phase of the auction, bidders who can pay cash will be allowed to compete for additional erven that may only be bought during the second phase.”Further, no resale of properties is allowed as long as the property is registered in the name of the City,” Katoma said.Only recently, the Windhoek municipality auctioned 336 plots in terms of the new policy.There were 1 335 registered buyers, 1 053 of them classified as first-time buyers.The 336 plots were sold for a staggering N$59,78 million, although the reserve price was only N$13,27 million.On average, the plots fetched N$351 per square metre compared to a reserve price of N$78 per square metre.Five plots in Auasblick went for an astonishing N$608 per square metre.Seven plots in Cimbebasia were sold for a record N$359 per square metre, while in Khomasdal, 18 plots fetched N$220 per square metre.Katoma told the press conference that a report was being compiled so that the municipality’s management could evaluate the success of the new policy.Joseph told The Namibian that most houses in Windhoek and major towns in Namibia were grossly overvalued.Because of this, he said, activity on the property market had gone down 30 per cent compared to last year.”What we have seen over the months is growing resistance from buyers.Most people feel the properties are way overpriced,” said Joseph.As a result, many houses in Windhoek’s more expensive suburbs have been on the market for some time with no takers.Joseph said although borrowing was cheap at the moment, with interest rates hovering between 11 and 12 per cent, most buyers could not afford the escalating house prices.A survey showed that an ordinary three-bedroom house in the eastern suburbs of Eros and Klein Windhoek is now fetching about N$1.5 million.Last year, the same properties were selling for anything between N$800 000 and N$1 million.

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