The elite are milking housing cash cow - AR

Land activist Job Amupanda says Namibia’s housing market growth as indicated in the latest FNB Housing report is evidence that housing has stopped being about human settlements, but is a cash cow for the elite and capitalists. The latest report by Daniel Kavishe, market research manager at the First National Bank Group, indicates that house prices in Namibia had increased by an estimated 87.8% from 2010 to 2015, while volume growth only increased by 30.5%. The report found that the Deeds Office recorded a 40% drop in transactions year on year, due to a slowdown in purchases in the northern and central towns. Kavishe advised that the rate of supply may need to triple to help ease price growth. Gross Domestic Product (GDP) per capita and recent labour force surveys further suggest that disposable income has increased by 8% annually in the different economic sectors, suggesting higher incomes for consumers. “This is further corroborated by the age of buyers for both cars and houses, which seems to have dropped, with 40% of current owners on the market under the age of 40 while five years ago the market was supported by individuals between the age of 40 and 50,” said Kavishe. Kavishe noted that most struggling consumers are from the areas of Khomasdal and Katutura, but are ironically office workers and semi-professionals. “Young professionals could potentially struggle if drastic and difficult decisions aren’t made to contain spending,” he said. Speaking hot on the heels of the report being made public, Amupanda said the 40% drop in house registrations year-on-year recorded by the Deeds Office shows that people are drained by the system. “Our people are tired of molestation by capitalist anarchy and greed, characterising the housing market. They have faith, are hopeful and waiting for the promises of the 24 July 2015 Executive Social Agreement,” said Amupanda. The 24 July 2015 Executive Social Agreement documents immediate short-term solutions, as well as long-term strategic interventions were agreed to in a meeting between the government and the Affirmative Repositioning (AR) movement mid-last year. According to Amupanda, housing prices remain an outstanding matter of the agreement. “We raised this matter with Prime Minister Saara Kuugongelwa-Amadhila in our last meeting with her last year. In that meeting we discussed practical steps on what is to be done. As such, we will seek audience with her again to follow up on this very matter of housing prices and related matters such as rent control,” said Amupanda. Amupanda added that the movement would seek a second meeting with President Hage Geingob on the issue of house prices and rent control. Kavishe further took a look at Windhoek’s city centre, which has undergone major changes over the last few years, and found that the areas in demand have also changed. “There has been a 63% increase in demand in areas like Academia while in Cimbebasia demand has dropped by 50%. Eros, Hochland Park, Dorado Park and even Rocky Crest are areas where demand has dropped by 55%, 41% and 27%, respectively. “However, we find that most consumers have opted to live in Khomasdal, Omeya, Elisenheim and Okuryangava. “The preference in choice of living seems to be a pricing matter and this is supported by evidence from the growth across different sectors,” noted Kavishe. The report says the average volume growth in the lower segment has increased from -13% to 20% while in the upper segment it has dropped from 21% to -15%. “Property between N$1 million and N$2 million is where the main growth sits, at 47% year on year,” he added. The FNB Housing Index found that there is still a large migration from either smaller towns to the city, or rural areas to the city. The northern towns of Ongwediva and Rundu are growing fast but still offer reasonable property prices. The median house price in Ongwediva hovers around the N$500 000 mark, while in Rundu it edges towards N$650 000. The coastal towns are gaining popularity too, with the median price in Walvis Bay standing at N$725 000 for stand sizes up to 400 square metres and several areas in Swakopmund reflecting a median price of N$900 000, but stand sizes are as large as 586 square metres. Kavishe remarked that the data suggests that a massive supply of low-cost housing over consecutive months would re-price the market downwards, thereby improving affordability across the country. “Managing the demand tactics will only mask the problem temporarily but won’t solve the problem. The interest rate environment in Namibia is bound to change drastically over the course of 2016 and that will not bode favourably for the already indebted consumer,” concluded Kavishe. Amupanda promised landless people that the AR movement has not forgotten the matter of house prices and rent control. “We will battle this matter until it is resolutely solved in the interest of the landless and the helpless democratic majority of our society,” Amupanda said. MERJA IILEKA