The Bank of Namibia (BoN) has revealed that acquiring property in the country is a complex and challenging process with various obstacles related to costs, regulations, and procedures making the overall procedure extremely inefficient.
According to BoN Governor, Johannes !Gawaxab, a recent study conducted by the central bank reveals that acquiring property in Namibia is a challenging process.
The Governor noted that unlocking the potential of rural Namibia will require a new legislative framework.
“The land tenure system is a prohibitive factor contributing adversely to citizens and businesses alike, especially not exploiting the full potential of communal areas where the majority of Namibians live,” he said during BoN’s 24th Annual Symposium held on Thursday morning.
The Governor stated that the process is also fragmented, expensive, and time-consuming, which can be a burden for potential buyers, investors, and other market participants.
“The Bank, in its advisory role, will soon be calling a stakeholder workshop with all players with the aim of ensuring the process is streamlined and recommendations are actioned in the shortest possible time,” he explained.
!Gawaxab noted that access to financing through converting title deeds into some form of tradable leasehold, which may unlock funding, is required.
Consequently, this, in turn, can boost agricultural productivity and tourism activities in communal areas.
“We urge all stakeholders to fully support this crucial work, which could unlock the potential of property ownership including in our rural areas,” he urged.
BoN director for research and financial sector development Emma Haiyambo emphasised the importance of addressing land rights issues and the need for alternative solutions to enhance financial inclusion.
Agent banking emerged as a potential tool to bridge the gap and bring financial services closer to the community, ultimately promoting economic development and prosperity, according to Haiyambo.
“By establishing a network of agents in underserved areas, we can enable more people to access basic financial services conveniently,” Haiyambo explained.
She pointed out that having access to land is a “fundamental requirement for economic development and growth”.
However, she highlighted the inability to use land rights as collateral to access financial resources as a significant constraint faced by many in Namibia.
“We need to address the issue of land rights, without the ability to use land as collateral, individuals and communities are limited in their access to finance, which hampers economic development,” Haiyambo stated.
This comes as Namibia’s property market has witnessed a staggering 1,258% surge in average housing prices between January 1990 and March 2023.
According to Simonis Storm, the average house in Namibia today costs 13 times more than it did over three decades ago.
The research firm’s market overview of Namibia’s property and housing revealed that the significant increase in property values raises concerns, particularly for the younger generation aged between 18 and 35, who face an estimated unemployment rate of nearly 60%.
“Affording housing, which has become 13 times more expensive, is becoming an increasingly daunting prospect for them. One critical aspect that remains unclear due to the lack of comprehensive salary data is whether average salaries have kept pace with the rampant inflation in housing prices,” Simonis and Storm said in a recent report.
