Real Estate Investor Magazine South Africa November 2016 | Page 50

NAMIBIA

Robust Buy-to-let market drives market
Limited access to land and housing
BY DREW HOOK

N

amibia is one of the most sparsely populated
countries with large tracts of open desert
land and magnificent landscapes with a
population of around 2,3 million people. It is a land
abundant in game such as elephant, antelope, rhinos,
lions, zebras and springboks. Namibia is one of the
least populated countries in the world but access to
land or housing is a struggle for locals. Government
has a massive 150 000 housing backlog.
It’s capital city Windhoek is the stronghold of
Namibia property investment followed by coastal
towns such as Swakopmund, Walvis Bay and in the
North, areas such as Katima Mulilo and Ongwediva.
Namibia has some of the world’s most expensive real
estate prices and a 2015 FNB report ranked Namibia
top of the global list of highest property inflation
in the world with an annual price growth of 16.7%.
The country struggles to meet the growing housing
demand despite numerous government interventions
to increase new housing supply,” says Namene Kalili,
the research and development manager at FNB
Namibia Holdings.
Windhoek recently has been a driver of high
property prices and some have become unaffordable
for the local community. An average property goes for
N$1,900,000 in Windhoek while in South Africa the
average property is around R1, 2 million. Skyrocketing
house prices are linked to the slow supply of serviced
land on the market. High prices are a matter of supply
and demand and can take two to four years for a
land applicant to get a plot from the municipality. In
2013, the government launched a R45-billion Mass
Housing Development Programme (MHDP) to build
180 000 houses by 2030. The project has not affected
the market yet as its implementation continues to be
hampered by delays.
The latest FNB report shows that less than 10%
of households in Namibia can afford a property in

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NOVEMBER 2016 SA Real Estate Investor

the lower-priced segment. The minimum income
requirement for the lower price segment is at R15
000 a month to qualify for finance. To illustrate
the increases, FNB research shows that a house in
Namibia’s capital, Windhoek, cost R470 000 in 2004,
increased by 85% to R875 000 in 2014.
Interestingly though Namibia has a highly robust
buy-to-let market at the moment. The 17% proportion
of buy-to-let investors compared to SA’s 8,3% is
indicative that investors see longer term value. This is
largely due to differing strengths of the two markets.
Faanbergh Winckler Projects is a leading residential,
commercial developer and investor in Namibia. In
2015 they launched Riverport and Weissdorn Village
in Windhoek aimed specifically at South African
investors looking to broaden their portfolios outside
of South Africa, which has been hugely successful.
They have just launched two other developments
in Swakopmund, Plover Park and Swakopmund
Retirement Village. Pieter Krugel of Faanbergh says,
‘The opportunity of owning real estate in Namibia for
first time home buyers is a dream of many however, not
in the current economic climate. It is clear that South
African investors can benefit from this opportunity.’

FACTS ON NAMIBIA
Capital
Population
Currency
Language
Unemployment
GDP
Inflation rate
Interest rate
Corporate tax

Windhoek
2, 3 million
Namibian dollar N$
English/German
28,1 %
3,4 %
6, 9 %
10,75 %
33%

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