Property Market Very Tight

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By Petronella Sibeene WINDHOEK The demand for residential property continues to exceed supply, especially in the capital and at the coast. This was revealed by Bank Windhoek’s Managing Director James Hill last week, when the bank awarded prizes to estate agents in the property industry. “There is an enormous demand for houses in Namibia. The availability of land is the most restrictive factor, particularly in Windhoek,” he said. This is reported to be due to the constant influx of people to the capital for various reasons, among them the search for employment and a better life. Prime Minister Nahas Angula during the announcement of office-bearers of the City of Windhoek a few months back said that as the property business booms in the country, property ownership has become problematic in the city. Exorbitant prices of erven have made it impossible for middle and lower income earners to purchase land. “It costs more than N$300 000 to buy an erf. The rich continue buying property, excluding others.” Angula maintained that something must be done about the situation otherwise Windhoek city would be owned by very few individuals. In the 2005/2006 financial year, Bank Windhoek registered business loans of more than N$206 million from estate agents across the country. This amount was channeled to the bank by approximately 100 estate agencies. The bank in turn granted loans for development projects in Namibia exceeding a total construction cost of N$318 million during the same financial year. Executive Officer of Bank Windhoek’s Banking Service Division, Andre Nel, said that the bank is aware of how competitive the property industry has become in Namibia. With high interest rates, though, he could not indicate by what margin the demand for property dropped drastically while the demand for shelter remained high. He explained that once interest rates are high, potential buyers of property resort to renting and that makes the work of property developers difficult. Due to that, clients are likely to struggle in paying back bank loans, which similarly affects the bank’s operations. “I believe you understand that once the bank grants a loan to a client, repayment becomes vital. If your client cannot repay the loan, the bank can suffer huge setbacks or loss,” he added. Bank Windhoek’s holding company Capricorn Investment Holdings also became conscious of the housing needs in the country and introduced a new subsidiary NamibBou. NamibBou is responsible for project developments and provides qualifying clients with a package deal, which include both the house and the finance. Meanwhile, the bank that identifies itself as a serious contender in the property industry introduced the Annual Estate Agents Awards event as an initiative to strengthen its partnership with the industry and to grow its market share, some eight years ago. Realizing the potential that lies in this sector, last Friday Bank Windhoek handed the award of Top Estate Agency of the Year 2005/6 to Joseph & Snyman. Piet Crous of Joseph & Snyman received the Achiever of the Year Award in the Commercial Finance category. The Residential Finance category award went to Venetia Venter of No. 1 Estates and Vincent Sorensen of Viking Developers took the Development Finance category. All these achievers of the year are based in Windhoek and the coast. From other regions, Cornerstone Real Estate scooped the top Estate Agency prize. For the 2006/7 financial year, the bank pledged to give a cash prize of N$100 000 to the Achiever of the Year in the residential category for estate agents situated in Windhoek and the coastal towns, while N$50 000 will be awarded to estate agents in the same category but from other regions.