Housing Finance in Namibia

Overview

The Namibian housing crisis is characterised by high housing costs due to the slow and costly delivery of serviced land and negligible affordable formal housing production, in a context of high unemployment, under-employment, and extremely low levels of household income. More than 40% of the Namibian population and around 66% of its urban population live in informal settlements or backyard shacks.[1]The overall population of Namibia increased from 1 409 920 in 1991 to 2 113 077 in 2011 and was estimated at 2 587 344 in 2021.[2] With an average growth rate of 1.4% a year, Namibia’s population is projected to increase from 2.3 million in 2015 to three million by 2030.[3] The National Planning Commission has estimated the urbanisation rate at 4.5% a year, which is higher than the average population growth.[4] The percentage of the population that is urbanised is projected to rise to almost 60% in 2025, up from 41% in 2001, which suggests that the challenges of capacity for urban development will intensify.[5]

Namibia is classified as an upper middle income country. Gross national income per capita is between N$66 236 (US$4 036) and N$208 342 (US$12 695). Gross domestic product (GDP) per capita levels are high by Sub-Saharan Africa standards,  estimated at N$77 614 (US$4 729) in 2021.[6]  Real GDP growth is projected to increase to 3.2% in 2022 before moderating slightly to 2.9% in 2023. The projected improvement in 2022 is mainly on account of growth in the mining sector, particularly in diamonds and gold. Most primary industries as well as secondary and tertiary industries are expected to register positive, but with low growth rates during 2022 and 2023.[7]

The ongoing war between Russia and Ukraine and associated economic sanctions on Russia has led to supply shortages of various consumer products as well as some key production inputs, contributing to high inflation around the world. The Bank of Namibia (BoN) has responded to this global crisis by increasing the interest rate by more than what was anticipated. The  annual inflation rate accelerated to a more than five-year high of 6.8% in July 2022, driven by surging food and transport costs and the lingering effects of COVID-19 lockdowns and extreme weather. In August 2022 the BoN raised its key lending rate by 75 basis points to 5.5%[8], bringing Namibia on par with South Africa, which raised its benchmark interest rate by the same amount in July 2022, and aligns with other central banks seeking to blunt inflation and halt capital outflows.[9] ​The rising interest rate environment will add further pressure on mortgage loan growth in 2022, with the cost of lending increasing as most commercial banks will be increasing their Prime Lending rate and Mortgaging Lending rate.[10]

Climate change has had a negative effect on Namibia, affecting the population and the country’s development goals. The country has a harsh desert and a low-precipitation climate, worsened by other existing vulnerabilities including changing rainfall patterns and rising temperatures.[11] The country has prioritised adaptation measures, as reported in National Development Plans (NDPs), among other documents, and highlighted through the Adaptation Communication. [12]  Some recommended adaptation priorities include the improvement of climate-resilient engineering and building standards for infrastructure in the housing, rail, transport, coastal, waste management, telecoms, refrigeration, and energy sectors.[13] Namibia has made significant progress in implementing various climate change mitigation and adaptation frameworks including the United Nations Framework Convention on Climate Change (UNFCCC), Sendai Framework for Disaster Risk Reduction 2015 -2030 and National Disaster Risk Management Plan (NDRMP) of 2011 (currently being reviewed).[14] The NDRMP aims to guide and strengthen national capacity for disaster risk management and to provide a framework for sectoral and regional disaster risk management in Namibia. The Ministry of Urban and Rural Development takes action to prevent, prepare, and recover from fires involving the structural components of various types of residential properties, infrastructure failures, and the rehabilitation of damaged infrastructure prior, during, and after disaster situations.

[1] Republic of Namibia (2022). Revised National Housing Policy 2022. https://ilmi.nust.na/sites/default/files/National%20Housing%20Policy-2022%20Revision-Draft%20for%20Stakeholder%20Consultation.pdf  (Accessed 20 August 2022). Pg. 8.

[2]World Bank (2021). Data. Population total – Namibia. https://data.worldbank.org/indicator/SP.POP.TOTL?locations=NA (Accessed 20 August 2022).

[3] Mulama, L. (2015).  Population Dynamics. Policy Brief April 2015.National Planning Commission. https://www.npc.gov.na/wp-content/uploads/2022/06/Population-Dynamics-policy-brief-in-format-2nd-ed.pdf (Accessed 3 August 2022). Pg. 3.

[4] Ministry of Regional and Local Government, Housing and Rural Development. (2009). National Housing Policy. Reviewed July 2009. https://www.ohchr.org/sites/default/files/Documents/Issues/Housing/sub-nationalgovernments/201114_Response_Namibia2.pdf (Accessed 27 July 2022). Pg. 6.

[5] National Housing Policy 2009 https://www.npc.gov.na/wp-content/uploads/2022/06/National-Housing-Policy-1991.pdf (Accessed 22 August 2022)

[6] World Bank (2021). Data. GDP per capita (current US$) – Namibia.   https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=NA  (Accessed 20 August 2022)

[7] Bank of Namibia. (2022).  Economic Outlook. August 2022. https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/19/19aad5d0-2adc-4449-8fc8-cb1c4748ddd1.pdf  (Accessed 10 August 2022). Pg. 3.

[8][8] Bank of Namibia (2022). Economic Outlook. August 2022 https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/19/19aad5d0-2adc-4449-8fc8-cb1c4748ddd1.pdf (Accessed 15 August 2022). Pg. 6.

[9] Ibid.

[10] African Markets. (2022). Namibia Central Bank increases repo rate to 5.50%. 17 August 2022. https://www.african-markets.com/en/news/southern-africa/namibia/namibia-central-bank-increases-repo-rate-to-5-50 (Accessed 28 August 2022).

[11]  Republic of Namibia. (2021). Namibia’s Climate Change Adaptation Communication to the UNFCCC 2021.  https://unfccc.int/sites/default/files/resource/namibia-adaptation-communication-to-the-unfccc.pdf  (Accessed 28 August 2022) Pg. 8.

[12]  Republic of Namibia. (2021). Namibia’s Climate Change Adaptation Communication to the UNFCCC 2021.  https://unfccc.int/sites/default/files/resource/namibia-adaptation-communication-to-the-unfccc.pdf  (Accessed 28 August 2022) Pg. 8.

[13] Ibid.

[14] United Nations. Namibia. Overview. Office of the High Commissioner for Human Rights. https://www.ohchr.org/en/countries/namibia (Accessed 28 August 2022).

Access to Finance

Namibia has one of the most sophisticated and highly-developed financial systems in Africa.[1] It comprises a diverse range of institutions, which are mostly private. The banking sector is mature, profitable, and well-capitalised. Namibia has eight commercial banks: Bank Windhoek, First National Bank, Nedbank, Standard Bank, Trustco, Banco Atlantico, Bank BIC and Letshego. These are  dominated by four large financial conglomerates (three of which are subsidiaries of South African banks) that hold 98% of total bank assets.[2] The commercial banks offer various property financing via multiple products such as mortgage finance, capital finance, and development finance. The non-banking financial Industry sector is also well-developed, with total assets of around 62% of GDP,[3] dominated by private pension funds, and the Government Institutions Pension Fund (GIPFNamibia also has a number of development finance institutions, including the Development Bank of Namibia and the Agricultural Bank of Namibia.[4] There are no building societies in Namibia and the country is yet to pass regulations for registration of a building society with the BoN.[5] Building societies are institutions formed to take deposits and thereafter lend money out to exclusively buy or improve houses.

There are seven private mortgage loan providers in Namibia. However, these mortgage loans are mainly granted to upper income households, highlighting an unequal access to housing finance: in particular, the access of middle and lower income groups to mortgage finance is limited. For instance, average house prices in Namibia are between N$823 000 (US$50 148) and N$854 000 (US$52 037) for a 65m² house.[6] With a mortgage term of 20 years, as with most mortgage providers, the borrower pays, on average, a repayment of between N$7 142 (US$435) and N$7 411 (US$452).[7] Furthermore, mortgage lending in Namibia is currently facing elevated delinquency (slow and non-payment of mortgages), primarily due to the impact of the COVID-19 pandemic and high inflation. This reduces the risk appetite of mortgage institutions for lending in the housing market, especially among the medium and low income segments, which remain underserved. Annual growth in mortgage credit extended to households was 2.6% at the end of 2021 compared with 5.2% in the previous year.[8] The low demand for mortgage credit usually mirrors a weak housing market in a depressed economic environment.

The Shack Dwellers Federation of Namibia (SDFN), a network of 605 small-scale saving schemes that, as of 2019, had 20 400 members across the country, is a community-driven housing programme that produces secure, good-quality housing in Namibia.[9] SDFN has had a significant impact on the lives of low-income urban households in Namibia, particularly women. Due to their immediate need for water, food, and shelter, environmental sustainability is not typically a concern for the poor. However, the Namibian Housing Action Group and SDFN support efforts to address these needs. The local manufacturing of hollow concrete blocks on-site, for instance, avoids the need for transportation, and tree planting on individual plots is promoted. By developing the property on their own, members are able to be sensitive to existing environmental elements, such as enormous trees and greenery.[10] Other independent saving groups that are not part of the SDFN also exist.

The non-bank finance institutions include microlenders, pawnshops, and finance and leasing companies supervised by the Namibia Financial Institutions Supervisory Authority (NAMFISA). There were 426 registered and regulated institutions by August 2022[11] with a total book value of outstanding microloans at N$7.4 billion (US$451 million), an 8.1% increase from 2021[12]. Many Namibians depend on cash loans, as well as microloans and retail loans to supplement their monthly income and living expenses. Although a new Microlending Act was enforced in October 2018, with the intention of protecting borrowers from industry malpractices, the sector has been plagued by consumer complaints ranging from unauthorised extension of loan periods and overcharged interest.[13]

The International Finance Corporation (IFC), an international financial institution and a member of the World Bank Group has facilitated N$820.9 million (US$50 million) to the banking and microfinance subsidiaries of Letshego Namibia. IFC’s facility will help Letshego promote access to housing finance via affordable housing mortgages and home improvement loans to un(der)served individuals in Namibia.[14] Letshego, Namibia’s biggest microlender has launched affordable housing financing aimed at people who struggle to access housing because of a lack of affordability, stringent qualifying credit criteria, and restrictions in the location of houses. The financing is an all-in-one solution with land and a customisable house, or capital to purchase material to renovate existing homes or properties, wherever the structures may be located.

Namibia has various housing institutes and programmes that provide affordable housing, The National Housing Enterprise (NHE) is a state-owned company mandated to provide affordable housing for individuals, mainly government employees, and provides low cost houses valued at N$170 000 (US$10 359). It is an initiative of the Ministry of Urban and Rural Development. The Build Together Programme, established in 1992, is a state-supported, microcredit lender, land, and housing development programme. The programme focuses on people with incomes under N$3 000 (US$183).

[1] IMF. (2007). Namibia: Financial System Stability Assessment, including Report on the Observance of Standards and Codes on Banking Supervision. International Monetary Fund. 27 February 2007. https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Namibia-Financial-System-Stability-Assessment-including-Report-on-the-Observance-of-20478#:~:text=Namibia%20has%20one%20of%20the,sector%20is%20also%20well%20developed. (Accessed 20 August 2022).

[2] IFC. (2022). Country Private Sector Diagnostic – Creating markets in Namibia. International Finance Corporation. July 2022 https://www.ifc.org/wps/wcm/connect/1aede59b-0bbf-4302-aeb8-5ab50c8ebb07/Namibia_CPSD_Hi_Res+%28FULL%29.pdf?MOD=AJPERES&CVID=o7oRZLi (Accessed 28 August 2022).

[3] Ngatjiheue, C. (2017). Non-banking financial sector contributes 62% to GDP. The Namibian. 27 November 2011. https://www.namibian.com.na/62011/read/Non-banking-financial-sector-contributes-62pct-to-GDP (Accessed 2 August 2022).

[4] SADC. Namibia DFIs. Southern African Development Community Development Finance Resource Centre. https://www.sadc-dfrc.org/dfi-namibia-0 (Accessed 28 August 2022).

[5]  Amukeshe, L. (2022). Bank of Namibia revamps building societies regulations. The Namibian. 4 August 2022.  https://www.namibian.com.na/114869/read/Bank-of-Namibia-revamps-building-societies-regulations  (Accessed 27 August 2022).

[6] Uusiku, F. (2022). FNB House Price Index growth decelerates. Erongo.  21 June 2022. https://www.erongo.com.na/economics-ero/fnb-house-price-index-growth-decelerates2022-06-21 (Accessed 2 August 2022).

[7] FNB. (2021). FNB Residential Property Report: Quarter 3. https://www.fnbnamibia.com.na/downloads/namibia/housingIndex/HousingIndexSeptember2021.pdf (Accessed 2 August 2022).

[8] Bank of Namibia. (2021).  Economic Outlook 2021.  https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/f8/f873fb04-a066-4e1a-9b30-7a9a2764c230.pdf  (Accessed 15 August 2022)

[9] SDFN. Improving the lives of Poor People in Namibia. Shack Dwellers Federation of Namibia. https://www.shackdwellersnamibia.com/#:~:text=SDFN%20Vision%20%26%20Mission,accommodation%2C%20while%20promoting%20women’s%20participation (Accessed 28 August 2022)

[10] World Habitat. (2008). World Habitat Awards. Shack Dwellers Federation of Namibia. Finalist 2008. https://world-habitat.org/world-habitat-awards/winners-and-finalists/shack-dwellers-federation-of-namibia/ Accessed 25 August 2022)

[11] NAMFISA. Conduct and Compliance. Namibia Financial Institutions Supervisory Authority. https://www.namfisa.com.na/conduct-and-compliance/ (Accessed 5 August 2022)

[12] NAMFISA. (2022). Quarterly Report 2022. Namibia Financial Institutions Supervisory Authority https://www.namfisa.com.na/wp-content/uploads/2022/08/NAMFISA_QSB_Q1-2022-FINAL-web-version.pdf (Accessed 25 August 2022). Pg. 37.

[13] Republic of Namibia. (2018). Microlending Act 7 of 2018. https://www.lac.org.na/laws/annoSTAT/Microlending%20Act%207%20of%202018.pdf (Accessed 28 August 2022).

[14] IFC. Project Information & Data Portal. Letshego Namibia Housing. International Finance Corporation. https://disclosures.ifc.org/project-detail/SII/44605/letshego-namibia-housing (Accessed 2 August 2022).

Affordability

Namibia’s unemployment rate stood at 21.68% in 2021 with a youth unemployment rate of 40.44%  –  and an aggregate of 22.7% unemployed men and 20.62% unemployed women.[1] The Namibian housing sector is categorised into five market segments[2] namely: ultra-low, with monthly household income between N$0 and N$5 000 (US$305) represented by 62% of the population; low, with monthly household income between N$5 000 (US$305) and N$10 000 (US$609) represented by 25% of the population; middle, with monthly household income between N$10 000 (US$609) and N$20 000 (US$1 219) represented by 10% of the population; high, with monthly household income between N$20 000 (US$1  219) and N$40 000 (US$2 437) represented by 1.7% of the population; and  ultra-high, with monthly household income above N$40 000 (US$2 437) represented by 1.1% of the population.[3] It is the ultra-low to low income groups that are hard hit by housing affordability. In Namibia, a household is considered able to afford to buy a home if it costs 3.5 times the gross household income for a single earner household or 2.9 times the gross household income for dual-income households.[4] Most housing finance products require borrowers to have a minimum salary of N$12 900 (US$786) or (in some cases) N$14 300 (US$871).^[5]

Most poor people cannot afford land as it is very expensive. The cost of serviced land measuring 375m² is highest in Windhoek, costing N$228 000 (US$13 893), and cheapest in Keetmanshoop, costing N$20 300 (US$1 237), followed by Rundu, costing N$30 050 (US$1 831).[6]

The total construction of a standard three-bedroom house costs, on average, N$616 886 (US$37 589) in Windhoek, while in Keetmanshoop it could cost N$407 940 (US$24 857) due to varying land prices. The high prices of building materials exacerbates the high cost of housing construction. The average price of a bag of cement is estimated at N$85 (US$5), bringing the average total cement cost for a three-bedroom house to N$14 050 (US$856).[7] Full servicing of new land of 150m² including bulk infrastructure, gravel roads, street lighting, and electricity is estimated at N$45 000 (US$2 742), and full servicing for 300m² is estimated at N$86 000 (US$5 240). A core house of 35m² including bathroom and kitchen materials is N$40 000 (US$2 437). [8]

NHE acts as a developer and financier of credit-linked housing for individuals earning between N$5 000 (US$305) and N$20 000 (US$1 219) a month or a combined household income of N$30 000 (US$1 828) a month. Loan repayment periods range between 20 and 30 years at prime interest rate minus one. Furthermore, collateral of 20% or a deposit of 5% is required[9]. The Build Together Programme consists of four sub-programmes: urban/rural housing loans, social housing, single quarter’s transformation and the informal settlement upgrading programme. It is widely used for the loan element, with loan amounts varying between N$3 000 (US$1 823) and N$40 000 (US$2 437). To qualify for the NHE needs monthly earnings over N$5 000 (US$305) and a deposit of 10% of the value of the property. Generally, this scheme is focused on a population with some form of income, which is above 40% of the population. The Build Together Programme then supports the ultra-low and low income segments.[10]

[1]TheGlobalEconomy.com. Global Economy Indicators. Namibia. https://www.theglobaleconomy.com/Namibia/unemployment_rate/  (Accessed 5 August 2022)

[2] Republic of Namibia. (2022). Revised National Housing Policy 2022. https://ilmi.nust.na/sites/default/files/National%20Housing%20Policy-2022%20Revision-Draft%20for%20Stakeholder%20Consultation.pdf  (Accessed 15 August 2022)

[3] Ibid.Pg. 17.

[4] Republic of Namibia. (2022). Revised National Housing Policy 2022. https://ilmi.nust.na/sites/default/files/National%20Housing%20Policy-2022%20Revision-Draft%20for%20Stakeholder%20Consultation.pdf (Accessed 22 August 2022)

[5]Nedbank. Home Loans. https://www.nedbank.com.na/content/nedbank-namibia/desktop/na/en/personal/borrow/home-loans.html  (Accessed 2 August 2022).

[6] First Capital Namibia. (2021). First Capital Building Cost Index. September 2021. http://firstcapitalnam.com/cms/upload/Building%20Cost%20Index%20September%202021.pdf    (Accessed 5 August 2022

[7] First Capital Namibia. (2021). First Capital Building Cost Index. September 2021. http://firstcapitalnam.com/cms/upload/Building%20Cost%20Index%20September%202021.pdf (Accessed 5 August 2022).

[8] Republic of Namibia. (2022). Revised National Housing Policy 2022.  https://ilmi.nust.na/sites/default/files/National%20Housing%20Policy-2022%20Revision-Draft%20for%20Stakeholder%20Consultation.pdf (Accessed 3 August 2022)

[9] Ibid.

[10] World Habitat. (1995). World Habitat Awards.  Winner 1995 – Namibia. https://world-habitat.org/world-habitat-awards/winners-and-finalists/build-together-programme/  (Accessed 28 August 2022).

Housing Supply

The most recent estimate of Namibia’s housing backlog was from the NDP4, estimated at 300 000 units. It will require N$76 billion (US$4.6 billion) to clear the backlog[1]. With only 7 200 new units constructed a year, the government is not making a real impact on the backlog in the lowest income groups. In addition, Namibia’s population is growing at a rate of 1.8% per annum according to data from 2021.[2]

The Namibia second Harambee Prosperity Plan (HPPII) has set a target of delivering 85 000 housing units countrywide by 2025 through the following public and private stakeholders: the NHE, the GIPF, the SDFN, Ongos Valley, regional councils, local authorities and other private sector developers, including land developers, mass housing developers, public-private partnerships, and personal property developers that build affordable housing using debt and equity finance.

The waiting list for the NHE alone stood at just over 8 000 households in 2011.[3] Between its inception in 1993 until 2010, NHE delivered only 8 000 houses. NHE has been allocated to deliver 5 000 units in the four year period, but its delivery rate is still far below the expected target.[4] Government contributions to state housing projects such as the NHE and the Build Together Programme seem less efficient than the private sector. SDFN and private developers, through various programmes in the 2015/2016 period, constructed a total of 3 271 houses.[5]

The key challenge in the delivery of housing in Namibia is the lack of available serviced land, which is both slowing down the process of housing delivery and pushing up prices of serviced land. The limited availability of serviced land is mainly due to a lengthy and outdated approval process for proclamation, surveying, subdivision, and registration of land. Furthermore, vast tracts of land are unutilised as they are locked up in land banks. Additional challenges include the limited financial capacity of local authorities and a lack of surveyors and other qualified personnel at local levels.[6]

[1] Bank of Namibia. (2011). 13th Annual Symposium 2011. Housing in Namibia: Has the situation changed 21 years after Independence?  https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/c1/c1145421-398c-43f8-aca4-bd22e9b2de94.pdf  (Accessed 25 August 2022).

[2] Statistics Times. (2021). Demographics of Namibia. 4 November 2021. https://statisticstimes.com/demographics/country/namibia-demographics.php#:~:text=As%20of%202021%2C%20the%20population,day%2C%20which%20is%20ranked%20123rd (Accessed 21 August 2022).

[3] Ntwala, M. Helvi, F. and Fleermuys, F. (2011). Evaluating the Namibian Housing Market: Opportunities and Constraints. In Housing in Namibia: Has the situation changed 21 years after Independence? 13th Annual Symposium, Bank of Namibia. 2011. (Accessed 15 August 2022)

 [4] Sweeney-Bindels, E. (2011). Housing Policy and Delivery in Namibia. Institute for Public Policy Research. https://ippr.org.na/wp-content/uploads/2011/10/Housing%20Report%20IPPR.pdf (Accessed 5 August 2022)

[5] Ibid.

[6] Remmert, D. and Ndhlovu, P. (2018). Housing In Namibia: Rights, Challenges, and Opportunities. Institute for Public Policy Research. (Accessed 27 August 2022).

Property Markets

The Namibian property market is founded on a well-established and secure system of property registration and ownership. The country made property registration more transparent by publishing time standards for issuance of deeds and official cadastral maps. Namibian laws and policies recognise women’s ability to inherit, own, and access property. Namibia has 41.5% of women registered with secure land use rights in accordance with the Communal Land Reform Act.[1]

House prices in Namibia continue to rise, albeit at a slower pace. FNB residential property price index posted a 12-month average growth of 4.7% at the end of March 2022.[2] House prices in the capital Windhoek are falling and demand is now declining sharply because of a continuous aggressive increase in interest rates and increased inflation leading to an unfavourable appetite for credit. This is precipitating a decrease in demand for mortgage loans and homeownership in general. Sales of residential plots contracted by an average of 16.2% at the end of 2021, up from 45.2% at the end of September 2021, but lower than the growth of 18% recorded in 2020. The FNB residential rental index for the fourth quarter of 2021 posted a smaller contraction of 0.7% significantly better than the 2.1% recorded a year earlier.[3]

The Namibia Estate Agent Board regulates the estate agency profession by ensuring that all persons carrying out the activities of an estate agent as a service to the public are registered with it. A fidelity fund certificate, which is to be renewed each year, is issued as evidence of such registration and confirmation that such a person is legally entitled to carry out the activities of an estate agent.

Property rates are calculated based on the municipal value of the property. This means that the charges differ from property to property. The municipal value of property includes land and improvements.[4] Namibia made transferring property more expensive by increasing the transfer and stamp duties. Stamp duty and transfer tax is also imposed on the acquisition of immovable property. Stamp duty is payable at N$12 (US$0.73) for every N$1 000 (US$61) and transfer duty is payable at 12% of the acquisition value of any property acquired by a person and payable within six months of the acquisition.[5]

[1] UNDP. (2014). Strengthening Dryland’s Women’s Land Rights: Local Contexts, Global change. United Nations Development Programme. https://www.unccd.int/sites/default/files/relevant-links/2017-03/Dryland%20women%20Land%20rights%20-%20Final.pdf (Accessed 20 August 2022)

[2] FNB. (2022). FNB Residential Property Report 2022. https://zone.my.na/mwmain/fnbhousepriceindexgrowthdecelerates2022-06-2119970  (Accessed 26 August 2022)

[3]FNB. (2021). FNB Housing Price Index Q3 2021. https://www.fnbnamibia.com.na/downloads/namibia/housingIndex/2021/HousingIndexSeptember2021.pdf (Accessed 10 August 2022)

[4] Global Property Guide  (2022). Tax on property income in Namibia. 254 May 2022.  https://www.globalpropertyguide.com/Africa/Namibia/Taxes-and-Costs (Accessed 2 August 2022)

[5] NamRA. Transfer Duty. Namibia Revenue Agency. https://www.namra.org.na/tax-types/page/transfer-duty-30120/ (Accessed 5 August 2022)

Policy and Legislation

Policy reforms in the country’s housing and land-tenure systems are creating new opportunities by eliminating bottlenecks for urban serviced land and housing delivery. The private sector is now vital in meeting the growing demand for formal housing, upgrading informal settlements, creating affordable mortgage finance products, and leveraging climate finance and green building opportunities. The government reviewed Namibia’s National Housing Policy (NHP) of 2009 with the Revised NHP 2022, published by the Integrated Land Management Institute in February 2022. The new policy shows that there is an annual need of about 30 000 housing units to replace existing and future substandard housing from 2021 until 2030. The NHP 2022 advocates that alternative housing models such as social rental, rent-to-buy, and housing cooperatives need to be explored through on-going experimentation, and monitoring and evaluation of the outcomes. The Namibia Co-operative Policy of 2017 has incorporated housing co-operatives and saving and credit co-operatives by pooling resources to privately purchase and develop land. The government role is to facilitate the co-operatives to acquire land for development activities or redistribution to their members.[1]

According to the United Nations, 6.9% of women aged 20–24 years old were married or in a union before age 18.[2] The Sustainable Development Goal (SDG) indicator 5.1.1 measures government efforts to put in place legal frameworks that promote, enforce and monitor gender equality. Namibia had 91.7% of legal frameworks under the SDG indicator focus on the prevention of violence against women. The Namibian government’s housing policies do not focus on the youth or women. An incidence of poverty in female-headed households of 19% compared to 16% for male-headed households shows that there is a need for equitable consideration of women and vulnerable groups in policy formulation.[3] There is also a need for the development of gender disaggregated financial data in housing data.

The Government of Namibia established a multi-sectoral National Climate Change Committee in 2001 to guide national activities and measures aimed at adapting to climate change. The government also developed a Climate Change Policy (NCCP) in 2011, as well as a National Climate Change Strategy and Action Plan (NCCSAP) which was approved by Cabinet in 2014. The NCCSAP is a key instrument and strategic implementation plan that operationalises the NCCP from 2013–2020.[4] The Government of Namibia is investigating options to both increase energy security and encourage the efficient use of energy through the Vision 2030 agenda, which supports developing adequate baseload power through the construction of energy infrastructure. The Revision of National Building Codes to Incorporate Renewable Energy Technologies and Energy Efficiency Principles and the Namibia Energy Efficiency Programme in Buildings (NEEP) advocate the nationwide adoption of energy-efficient technologies and practices in  commercial and residential buildings such as government office buildings, hospitals, hotels, schools and possibly a sample of residential buildings.[5]

The Disaster Risk Management Act of 2012 is aimed at establishing institutions for disaster risk management in Namibia. A disaster risk management plan is in place to cover among others drought and floods from climate change. It is also aimed at providing an integrated and coordinated disaster management approach that focuses on preventing or reducing the risk of disasters, mitigating the severity of disasters, emergency preparedness, rapid and effective response to disasters and post-disaster recovery.[6]

[1]  Republic of Namibia. (2017). Namibia Co-operative Policy 2017.  http://extwprlegs1.fao.org/docs/pdf/nam180910.pdf  (Accessed 14 August 2022)

[2] UN Women. Women Count. Country Fact Sheets, Namibia. https://data.unwomen.org/country/namibia (Accessed 25 August 2022).

[3] Namibia Statistics Agency. (2016). Namibia Household Income and Expenditure Survey (NHIES) 2015/2016.   https://d3rp5jatom3eyn.cloudfront.net/cms/assets/documents/NHIES_2015-16.pdf  (Accessed 20 August 2022).

[4]United Nations. Namibia. Overview. Office of the High Commissioner for Human Rights.   https://www.ohchr.org/en/countries/namibia (Accessed 20 August 2022).

[5] Alakriti Consulting (2014). Terminal Evaluation. Namibia Energy Efficiency Programme (NEEP). May 2014. https://www.gefieo.org/sites/default/files/documents/projects/tes/3793-terminal-evaluation.pdf (Accessed 20 August 2022).

[6] Republic of Namibia. (2013). Regulations in terms of the Disaster Risk Management Act 10 of 2012

Section 57.  http://www.lac.org.na/laws/annoREG/Disaster%20Risk%20Management%20Act%2010%20of%202012%20-%20Regulations%202013-349.pdf (Accessed 20 August 2022)

 

 

Opportunities

The Namibia Statistics Agency (NSA) released the first urban land statistics in 2021. The publication provides summaries of the number of serviced plots in all the proclaimed urban areas. Namibia is the 58th least corrupt nation out of 180 countries, according to the 2021 Corruption Perceptions Index reported by Transparency International and the country appears to have remained constant on most measures. On the Property Rights Index Namibia was 54 in 2022.[1] Scores are from 0 to 100, higher scores are more desirable meaning that property rights are better protected. Opportunities exist for improving data availability related to title/tenure, construction, financing, and sale of houses.

The HPPII has proposed that Namibia become  a supplier of green energy. Namibia is already better-positioned resource-wise, with its high potential for solar, wind and biomass generation, and invader bush that is widely spread in the country’s northern parts, which allows a large-scale bioenergy-based production capacity.[2]

Namibia remains a country with high property prices and a soaring housing-supply backlog, presenting opportunities for the sector.[3] To deal with the challenge of inadequate capital and availability of affordable and serviced land NHE has sought private partners to boost the number of houses it is delivering. The Inclusive Sustainable Urban Development by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) supports the Ministry of Urban and Rural Development in its efforts to guide local authorities’ town planning and to upgrade informal settlements. Other development banks, such as KfW and the African Development Bank fund selected projects.[4]

[1] Global Property Guide. Property Rights Index in Namibia compared to Africa. https://www.globalpropertyguide.com/Africa/Namibia/property-rights-index

[2] Energypedia. (2020). Namibia Energy Situation.Energypedia rgypedia. Namibia Energy Situation. https://energypedia.info/wiki/Namibia_Energy_Situation (Accessed 28 August 2022)

[3] Uusiku, F. (2022). The FNB house price index retreated from a double-digit growth. 20 April 2022. https://www.linkedin.com/pulse/fnb-house-price-index-retreated-from-double-digit-growth-?trk=pulse-article_more-articles_related-content-card (Accessed 28 August 2022)

[4] Delgado, G. (2022). Adequate housing in Namibia. Introduction AUHF Public seminar. September 2022.

Availability of Data on Housing Finance

Most information comes from public organisations and government departments, but is either outdated, subjective, or is incomplete.

The BoN and NAMFISA are the main sources of macroeconomic data related to housing finance. The BoN’s resources contain data related to aggregate household indebtedness and the performance of the mortgage market. NAMFISA’s statistical bulletins contain data related to the performance of the microfinance market.

The NSA is the main source of public data on housing demand and supply. This institution publishes monthly statistics on the number and value of building completions for four major towns. NSA demand-side data includes its Land Statistics, Household Income and Expenditure Survey, Inter-Censal Demographic Survey and Population and Housing Census.

Mortgage data and land transaction statistics are virtually non-existent or, when they exist, are not categorised, processed or analysed rigorously enough to be reliable.

The digitisation of the deeds registry is still underway and should facilitate public provision of data.

Green Applications for Affordable Housing

NEEP, which focuses on the green application of buildings, is a new project co-funded by the Global Environment Facility. The three-year project is being implemented by the Ministry of Mines and Energy and the Renewable Energy and Energy Efficiency Institute at the Polytechnic of Namibia.

Namibia’s top energy sources are petroleum, hydropower, imported electricity, and imported coal. The country’s own internal resources supply less than one-third of its energy requirements. There are around one million Namibians without access to electricity, which means that almost half (47%) of the country is living without any electricity access. This is linked to a lack of service delivery by the council in informal settlements where 66% of urban populations live.

The Green Building Council Namibia initiative is also taking place under NEEP. The Namibian Clay House Project Development Trust focuses on projects that develop and deliver innovative solutions using local and sustainable materials. This provides  environmentally friendly sanitation and allows communities to use clay in constructing houses, thus combating land degradation. FNB Namibia Holdings at Parkside building achieved the first 5-Star Green Star design rating in Namibia.

Websites

Bank of Namibia https://www.bon.com.na/

First Capital Namibia http://www.firstcapitalnam.com/

Namibia Financial Institutions Supervisory Authority https://www.namfisa.com.na/

Namibia Statistics Agency https://nsa.org.na/

Government of Namibia Portal www.npc.gov.na/