Namibian Real Estate sector firmer

NAMIBIAN real estate withstood the global economic crisis despite the price instability experienced in the South African market, a First National Bank properties analyst has said.

The properties expert and economist, John Loos, said the Namibian real estate was not affected much despite a dip in the number of people seeking mortgage and loans in the past two quarters of 2009.

Loos attributed the stability to the limited competition for property as compared to the SA market where demand for accommodation is high.

He believes Namibia is not a risk investment destination in the real estate sector because of its geographical location.

The analyst, however, said the shortage of land has led to the slowing down of the real estate sector development since construction moguls from Europe prefer investing in western and northern parts of Africa as it is closer to home.

Loos also said the stability currently experienced in both the Namibian and the South African banking sector could be a sign that the two countries have gotten to grips with the effects of the global economic crisis.

He said interest rate cuts are not the way to cushion home owners from biting costs as this would backfire at some point when inflation takes an upward trend.

Loos said this would force central banks in both SA and Namibia to up their repo rates as a way of reducing inflation.

He, however, said interest rate slashes in both SA and Namibia have somewhat helped debt servicers meet their targets but he projected tougher times ahead.

Loos believes the housing sector might fail to sustain the pressures brought about by debt growth as their spending abilities will be limited by lack of funds.

However, the sector has been criticised for not offering an equal opportunity to the middle class and poor because they are exposed to stringent collateral conditions by commercial banks.

Article by: Tirivangani Masawi -