The cost of land and building construction remains high, which causes the affordability of a basic house for the low and middle income segments to be problematic.
Although the Namibian economy enjoyed consistency above 5% growth over the past five years, spurred on by an expansionary fiscal policy and surging foreign direct investments, a slowdown was expected.
While the economy grew by 5.7% in 2015, growth is set to slow, going forward, constrained by a slowdown in construction activity, a deteriorating fiscal position, an uncertain policy environment, and slowdown in major trading partners Angola and South Africa.
The availability of serviced land remains a challenge, which has also been highlighted in the Harambee Prosperity Plan under the pillars of Social Progression and Infrastructure Development, whereby thousands of serviced plots will be made available in all towns within the next few years.
The cost of land and building construction remains very high, which causes affordability of a basic house for the low and middle income segments to be problematic. Initiatives from government, in partnership with the Government Institutions Pension Fund (GIPF), to assist with finance for these expensive services are an example of their commitment towards this objective.
The property market experienced mixed growth, with a decline in demand in the high-end market with a price range above N$2.6 million, while there is strong price growth in the middle and lower segments of the market. However, volume growth in the middle and lower segments remained poor due to high input costs and service delivery.
One should also not lose sight of the impact of the severe drought that the country is experiencing on the housing industry, as the desperate attempts to save water threaten to cripple the construction sector. The sword of rent control and the redistribution of land also hang above the heads of property developers, owners and estate agents, as the impact of this on the housing industry is currently unclear.
Two new laws to regulate property ownership, namely the Estate Agents and Property Developer Bill, and the Land Bill, are still on the agenda for parliament to discuss before the end of this year.
Despite all the challenges, Bank Windhoek, once again, achieved an acceptable annual growth. Part of this successful growth was due to the business conducted by our Property Finance Department.