Govt to Control House Prices – in a Bid to Stop Rising Cost

GOVERNMENT is looking at tightening the law to control the escalating house prices, says the Minister of Trade and Industry, Calle Schlettwein.

Schlettwein told The Namibian yesterday that he has begun the process of amending real estate laws to entrench several clauses that will ensure that industrial land and prices of properties are controlled.

“We are amending the law relating to real estate. That will include how property developers work, their prices and how they organise themselves,” he explained, adding that government is also looking at entrenching empowerment clauses.

The draft bill, he explained, is expected to be finished this year and then go to Cabinet for scrutinisation and approval.

The minister, who could not reveal the exact clauses he is looking at changing or inserting, admitted that Namibia’s real estate market is now one of the most expensive and ranked fourth in the world after Hong Kong, Dubai and Brazil.

“Our concern is from a price point of view,” he said, adding that the lack and cost of land and houses influenced the decision to amend the law.

Schlettwein further explained that the latest measures are not aimed at stifling the private sector but are instead taken “to make sure that scarce resources are used for government, such as industrialisation which is part of the NDP”.

He said they do not have the formula on how the prices will be controlled but indicated that they are working on finding one.

President Hifikepunye Pohamba urged Cabinet earlier this year to find ways to address the high, unaffordable land and housing prices in urban areas saying “we must come up with a sustainable solution”.

A report issued this week by Namene Kalili, the Manager of Research and Competitor Intelligence at FNB Namibia, said the housing prices increased by 20,8% year on year.

Kalili said the house price inflation was mostly driven by properties in the upper price segment. “House price inflation was mostly driven by properties in the upper price segment, where property prices increased by 23% year on year, with a median price of N$1.93million.”

Property prices in the middle price segment increased by 18% year on year, with a median price of N$1.1 million, while property prices in the lower price segment increased by 12% year on year, with a median price of N$481 000.

The Namibian reported last year that on 10 May 1990, a three-bedroom house in Windhoek’s Khomasdal area was aertised for N$84 800. In May 2005, a three bedroom house in the same area was valued at N$400 000. Five years later in 2010, a similar house in the same area was valued at N$650 000. In 2012, however, the same house’s value nearly tripled to N$1.5 million. Today that figure has swelled further.

The measures by government come after Trustco, a company that is well-known for making money from legal insurance, made more than N$230 million from selling only five percent of industrial land it bought for N$3.5 million less than 10 years ago.

The company initially said it would develop low-cost housing projects on the land but has now gone all out for industrial property as businesspeople snapped up prime plots in the Lafrenz industrial area on the northern outskirts of Windhoek within a year.

Source : The Namibian