Within the next two years, Namibia would likely experience low investment in housing market that no investor would want to continue investing in real estate. Currently, real estate investment in Namibia is the safest due to its high return on investment (ROI), due the current high price of housing. Namibia is currently ranked as one of the most expensive in residential real estate properties. But after these 200,000 plots have been serviced, as announced this week by the government and the AR movement, it would cause prices in housing to drop extremely to their lowest, further causing investors to pull their money away from real estate properties investment as well as making banks not willing to issue mortgage loans. And this would cause severe dilapidation in residential properties value.
Large cities and towns will be hit the hardest, especially due to the high migration of people from large cities and towns to rural areas such as Tses with high economic development where more jobs are slated to be, causing large cities and towns to have ghost houses.
The ideal solution would be that the housing price should be market driven. By this I mean, let’s focus on job creation and not just jobs but good paying jobs, so that more Namibians can have high income to afford decent houses. When the demand for housing increases due to adequate income, then the price of houses would drop steadily as driven by market in proportion with the high demand in houses but supported and sustained by adequate income. The supplying of houses will increase as investors would have confidence in the housing market hence they would continue investing in real estate as the demand of houses skyrockets at an acceptable price due to many people with high income to afford to buy decent homes.
Now with these 200,000 new houses/plots thrown into the market which exceed the demand and below the income level, it is like having Bank of Namibia to print more money which basically devalues the currency.
I hope that when our esteemed political leaders and land activists make and take actions such as this to flood the market with more houses than the demand, I hope that they first do research in order to have quantitative data to enable them make well informed decisions.