First-time house buyers getting older

The backlog in housing has lead to run-away house prices as the Minister of Finance so succinctly put it in her budget speech, but for estate agents and developers, as well as the financing institutions behind these deals, it has created endless acreage of fertile soil.
Last week, FNB Namibia’s Realtor Club awarded their top estate agents, agencies and developers and expressed their gratitude for their on-going business at a plush award ceremony.
In his address Ian Leyenaar, CEO of FNB Namibia concentrated on the serious topic of the housing shortage and said the largest backlog of housing is in the lowest income brackets, with maximum monthly incomes up to N$1500 (estimated at 45,000 houses), and incomes between N$1,500 and N$ 4,600 (estimated at 30,000).
“While the Build Together programme focuses on people with incomes under N$3,000 per month, the National Housing Enterprise only provides products for incomes of over N$5,000 a month, which is less than 13% of the population,” he said.
He added that there are some serious challenges: “The prices of houses continues to skyrocket due to input costs and the mismatch between the rapidly rising demands for houses versus low housing outputs delivered by housing developers in the housing market annually. The lack of satisfactory budgetary provision by the government for the housing sector – in particular for the Build Together Programme and the National Housing Enterprise has further exacerbated housing shortages.”
Leyenaar also advised that a substantial portion of Namibians do not have access to credit facilities and consequently can not afford to buy urban land and housing. “The provision of affordable housing is also hampered by poor access to and affordability of land, especially in the urban areas.  Furthermore, inflexibility in the current land tenure system exacerbates the lack of right to land ownership and development of it by holders.”
Leyenaar concluded by adding: “On an interesting note and coming out of the FNB [housing] survey, the average age of buyers is relatively high at 41 years of age and thus our November statistics show that first time buyers are getting older.  This does indicate concern as younger buyers clearly can not afford the high cost of housing.”
Thomas Slabbert, FNB Head of Home Loans gave an overview of the performance of his bank in the real estate business and said:” The overall market has grown by 13.6% and FNB has grown by 14.2%. The reasons for this growth are as a result of the prevailing low interest rates (lowest in 30 years); the constant erection of new sectional title developments, together with new houses that is been built at Omeya, Elisenheim and other smaller developments and the increase in house prices on a year to year basis.
He said the total mortgage book in Namibia has reached a level of N$21.2 billion of which FNB had the largest market share of 38.4%. The FNB mortgage book on its own amounts to N$8.2 billion. “FNB has maintained our prudent credit criteria throughout the last 12 months. Even though we have met stiff competition from the other financial institutions, we were able to grow our book by N$1,2 billion for the last year. Although we were able to meet this growth our NPL ratio (non-performing loan) decreased and has reached an all-time low of 1.1% compared to the industry ratio of 1.50%.”