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Housing market suffocated with corruption- Latest report

by Kelvin Chiringa

Limited competition and corrupt practices continue to affect the local housing market standing in the majority of people’s way to acquiring decent accommodation, a latest report on Housing in Namibia: Rights, Challenges and Opportunities can reveal.

The report, carried out by Dietrich Remmert and Pauline Ndhlovu, states that there is a broad perception in Namibia that developers and real estate agents take advantage of the limited housing supply and high demand situation to increase prices.

“It has been noted that the sale price during such transactions can increase as much as four-fold based on the servicing cost per m2,” the researchers have observed.

Further, the auctioning of land which is already limited to the highest bidder has come under critical scrutiny as it has been blamed for driving up prices, severely limiting the ability of first-time buyers and low-income households to access land with their limited financial means. 

Sadly, local authorities have been found off-side, defending these practices.

Remmert and Ndhlovu argue that, “Profits from land sales are required to cover land servicing costs and are used to fund other capital projects as well as to subsidize municipal services to low-income households.”

“Some industry observers, including Namene Kalili from FNB and architect Nina Maritz have questioned the sensibility of local authorities and particularly the City of Windhoek in pursuing processes and regulations that arguably add considerable costs to the construction of buildings,” the researchers note.

Local authorities should rather look elsewhere to cover for these expenses, whether through rates or taxes, an opinion that has been corroborated by the Construction Industry Federations’ president, Nico Badenhorst, the researchers say.

While Remmert and Ndhlovu note that the construction industries and the real estate sectors are held to be highly susceptible to corruption, “In practice it is challenging to make clear statements on the depth and breadth of fraudulent activities within the Namibian housing industry.” 

They argue that such incidents do happen.

“However, many of these irregularities while definitely unethical and in opposition to an equitable, well-functioning housing market are not necessarily illegal. Similarly, some actions regarding questionable land sales involving local authorities could be attributed to inefficiency and incompetence at this level of government,” they observe.

On the other extreme edge, Remmert and Ndhlovu submit that the challenges in the housing sector are aggravated by among others, the high costs of construction materials, labour, high land surveying and bulk servicing costs and inadequate finance options.