Caught in the property trap

Exorbitant house prices and insane rental costs mean that many Namibians remain children forever – sharing a house with their parents because they can’t afford to live anywhere else despite earning decent salaries. For many who have moved into their parents’ backyard flats with their spouses and children, there seems to be no hope of owning their own homes. Eduardo Platt, an accountant, is just one of the many young professionals who are renting a place that will never be his. Although he managed to buy a flat for N$400 000, newly married Platt couldn’t keep up with the monthly instalments and had to move in with his parents. A year later he and his wife moved into a rented house in Khomasdal which costs them about N$7 500 per month, where they have been living for the past six years. “If you buy a house for N$1.8 million your instalment can be anything from N$18 000 up, how can a middle-class family afford this? And that is not even a decent house,” he says. A media practitioner, who preferred anonymity, and her IT specialist husband are also struggling to buy their own home. Although well educated and gainfully employed, they are forced to live in a cramped, rented two-bedroom flat in Academia where gardening or keeping a pet is simply out of the question. They have two children who attend local private schools. No luck “We have been looking for a decent and affordable house for the last five years without any success, so instead we opted to buy a plot to plot and plan but when we eventually bought the erf we could not afford to take out a second mortgage to build the house,” she says. According to her the only way they could afford a decent house would be to get an extra income. “It is so frustrating, there is simply no way one can afford a decent house where you can raise your children with middle-income salaries. And to rent is even more frustrating. The children cannot even play or have pets. They are locked in a prison.” Although many would think finding a house for N$700 000 in Khomasdal is a bargain, Charlton Jooste - a married father of a toddler and a newborn baby – says it isn’t so. Jooste, a corporate sales executive, not only had to ‘top up’ his loan but had to take out additional loans to make the house liveable. “The house cost us N$700 000 but we will have to get a loan for N$850 000 to replace the water system, replace doors and to fence off our yard,” he explains. “It is very difficult these days to get a house without being able to pay a large deposit.” Estate agent Mara Baumgartner says people usually ask for ‘top ups’ when they know the house is not worth the asking price. Baumgartner believes that moving in with your parents may very well be the option for the future. According to her, the situation has worsened to the extent that many young professionals are forced to rent sectional titles since house prices are out of their reach. “I didn’t do a single deal last year and I am not the only one. People concentrate on rentals because it is fast money, but the issue is also that owners want to force down their prices despite what valuators are saying,” she says. Baumgartner says it is unimaginable that the monthly rent for a townhouse in Rocky Crest could go up to N$14 000. “People think estate agents are responsible for these high prices but that’s not the truth.” Baumgartner, who has been in the property business for over 20 years, says there is a serious need for the government to reintroduce a regulatory board. “Our children will have to stay with their parents or wait until the mass housing project realises. If there is better care with how land is sold we may see relief,” she says. Out of reach The latest First National Bank (FNB) Housing Index states that the average house price in Windhoek stands at N$900 000 while houses in Okahandja and Swakopmund go for around N$700 000. However, according to Baumgartner no one will find a house for that price in Windhoek. “Houses in the cheapest suburbs such as Soweto in Katutura could cost a buyer N$1 million, while in the more affluent Dorado Park where houses were built for N$150 000 in 1993; houses go up to N$3 million at present.” Baumgartner, who worked for the former Swabou building society, says a two-bedroomed house in Dorado Park cost only N$87 000 in 1993. These houses are now sold for nothing less than N$1.5 million. In leafy suburbs like Ludwigsdorf and Klein Windhoek, large houses fetch up to N$6 million. “And to think that land was not even serviced, which means we can have affordable prices.” According to Baumgartner, the biggest problem is that some property owners demand ridiculous prices and refuse to accept less. “They simply do not want to accept valuations and you would expect this attitude from the uneducated but it is the educated and seemingly sophisticated people who think like this,” she says. Demand-supply economics FNB research manager Daniel Kavishe says a N$900 000 home loan translates into N$9 500 monthly repayment. However, this cost can be pushed up significantly if one considers body corporate levies in the case of sectional titles. “House prices are high because of the strong demand for and the shortage of houses, which allows those in the market to charge exorbitantly,” he says. He also argues that the quick rise in mortgage debt and the quick absorption of new properties that come into the market suggest a speculative housing market. “We anticipate that more houses will be bought for speculative purposes with the current growth rates experienced in the market,” he said. The national housing backlog has climbed relentlessly. It now stands at over 100 000 units and is growing at a rate of 6 000 units per year. The soaring house prices have also caught the eye of Urban and Rural Development Minister Sophia Shaningwa, who last week bemoaned the high cost of renting a place to stay. Speaking at a public hearing on the Local Authority Amendment Bill last Friday, she said it made no sense that people must rent flats for N$7 000 a month but are unable to pay off their own mortgages. The bill, which was rejected by the National Council, sought to restrict foreign ownership of land, which according to Shaningwa is what pushes housing prices up. JEMIMA BEUKES