City accused of manipulating land market
A decision by the City of Windhoek to avail only 234 ervens at the recently held property auction in which the City is said to have made N$141 million in profit, has been criticised as bordering on market manipulation.
Reacting to the 21 October auction where property prices averaged N$1,224 per sqm, a 96% increase from last years Auasblick auction, Namene Kalili, manager: research and competitor intelligence at FNB Namibia said there is a serious need to rethink the current land delivery model.
“The auction prices reinforce, what we have stated for quite some time now, that demand for land in Windhoek continues to outstrip supply and that land delivery needs to be accelerated as a matter of urgency.
“We estimate that there are 50 000 serviceable ervens in Windhoek and that 234 ervens auctioned in one calendar year is so far below demand, its bordering on market manipulation.
“With upset prices accelerating by 196% in 15 months, there is a serious need to rethink the current land delivery model because N$400 per sqm is not affordable for 60% of Windhoek households who will never afford land in Windhoek, let alone housing.”
Kalili said the exceptionally high erven prices will result in the delay of housing delivery on the market as developers seek to bring developed property prices within market expectations.
“Consolidations, density reduction and subdivisions would ultimately delay housing delivery by a year or two and we therefore do not expect immediate developments flowing from this auction,” he said.