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Housing still out of reachAffordable homes remain a pipe dream for many The demand for houses in the lower and middle segments appears to be on the rise, as prices in the luxury market drop. 
Despite falling house prices, aspiring buyers in Namibia are still facing major struggles to buy a home.Although the falling demand is hitting the luxury property market, according to commentators, families are still priced out of the market owing largely to a shortage of affordable housing in the country.
The dire shortage of housing units is also having a significant knock-on effect on affordability for first-time buyers.
While prices of houses remain relatively high, the growth driving it is slowing down and has been slow for some time now for the upper segment of the market.
On the opposite end, the demand for houses in the lower and middle segments appears to be on the rise and is reflective of the health of the economy, according to First Capital analyst Milner Siboleka.
According to him, while prices are rising overall, the growth is slow.
“Overall, prices are still rising, but at a much slower pace. However, looking at specific segments, the upper market segment price growth has plunged into negative territory in recent months while in the middle and low market segment, prices are still on the rise,” said Siboleka.
Property prices in the lower and middle segments were driven by basic economic principles of supply and demand, Siboleka said.
“For middle and low market segment houses, I believe the price growth has only adjusted from the speculative induced prices witnessed over the years, to the low levels reflective of the economic fundamentals,” he said.
Siboleka said he had noticed that price movements in the upper segment of the market were not driven by market fundamentals.
“For the upper market, property prices are different. In fact, the price bubble of upper market properties seems to have reached an inflection point. Instead of adjusting lower with the economic fundamentals of demand, prices in this market segment have been falling,” said Siboleka.
Priced out
There also appears to be no respite for potential house owners in the low and middle segments.
“We need to be mindful that house prices, like other asset classes, follow the theory of business cycles. However, with limited evidence of a rebound in purchasing power of both locals and foreign investors, in this case neighbouring countries [Angola], and the prolonged weak domestic economic fundamentals, I see this situation remain for a long time,” he told Namibian Sun.
Median prices
The average price of houses around the country remains above the N$1 million mark, data from FNB Namibia has shown.
This was the case for Windhoek, Walvis Bay, Swakopmund, Ongwediva, Henties Bay and Tsumeb, with all the towns sampled showing slight increases in price.
The only exceptions were Oshakati, Ondangwa, Keetmanshoop, Gobabis and Okahandja.
The data also showed that price increases were witnessed in all the towns indicated, with the only exception being Gobabis where negative price growth of N$337 000 was noted.
Despite the high prices, sales activity for property also remained slow and was not expected to improve. According to FNB Namibia property analyst Josephat Nambashu, the number of towns showing a decrease in property prices was on the up.
“Across the country we find 16 towns with positive growth, while the list of towns with negative growth is increasing,” he said.
Nambashu also pointed out that surveys conducted among estate agents had shown deterioration in sales activity.
“Our estate agent survey suggests that trading activity across the market is deteriorating and that properties are spending as much as 25 weeks on the market and particularly in the high income space,” he said.
Andreya Pereira Properties sales executive Jannie Erasmus was of the opinion that the market was more favourable to buyers. Sales in the upper segment of the market moved slowly, according to Erasmus.
“There is definitely a noticeable difference in the market. It is now becoming a buyer's market. This is due to an increase in supply of houses for sale. Most of our successful sales are selling below valuation, as an example we just received an offer sale for N$1.75 million despite having a value of N$2.05 million,” said Erasmus, who added that the changes were most noticeable in the higher end of the market.
University of Namibia academic Roman Grynberg said the property market had been showing signs of cooling for some time. He added that banks would remain resilient even with price corrections.
“The property market is certainly cooling and has been doing so for a while. Volumes have been declining even though prices have continued to rise. Our banks are relatively healthy and it would take a major price correction to put them in trouble,” said Grynberg.
A young professional, Anna-Lisa Shindongo, said buying a decent home was still a pipe dream for her. According to her, young professionals have to contend with making other purchases such as vehicles.
“We buy vehicles just so that we can have a possession. It is also better to rent. If you rent then you can move the disposable income to other expenses like food and fuel as an example. Some of us are also only starting out now. How can we afford to make these payments that are being sought?” she asked.
Nesdha de Jongh, who is employed at a local parastatal, said it would be very difficult for young professionals to meet the mortgage payments required by commercial banks, despite the noticeable slowdown in growth observed.
“We see house prices coming down. But what young person will be able to make a repayment of N$15 000 on a house? To add to that, a house also requires maintenance and there are other general expenses like food. The problem is the mortgage, to be honest,” he said.
OGONE TLHAGE
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