Namibians require a monthly income of N$36,000 to afford a N$1-million home loan, according to Salomo Hei, Economist and Managing Director at High Economic Intelligence.
This significant barrier to homeownership underscores the escalating affordability crisis in the country.
Hei said the high cost of housing is primarily driven by the price of land, which has skyrocketed in recent years.
Coupled with high interest rates and limited access to financing, homeownership has become increasingly out of reach for many Namibians.
“A monthly income of approximately N$36,000 is needed to afford a N$1-million home loan in Namibia. Given the current economic conditions and high housing prices, this financial burden is out of reach for a significant portion of the population,” he said.
He further explained that unemployment, which currently stands at a high rate, further exacerbates the affordability issue. When people are unable to find stable employment, they are less likely to qualify for mortgages.
“High unemployment rates significantly hinder housing affordability. A thriving economy requires a larger workforce to generate income and support economic activity. Increased participation in the labour market is essential for improving affordability and ensuring the success of housing initiatives,” he said.
However, Hei said new discoveries of resources like oil and gas could create jobs and boost the economy, potentially increasing demand for housing and driving prices down.
Additionally, investing in training programmes for low-skilled workers in the construction sector could help address the shortage of skilled labour and reduce construction costs.
“We anticipate that the recent discoveries in the oil and gas sector could create new opportunities for economic growth and development in Namibia. However, the window of opportunity for maximising local content and value creation in this industry is rapidly closing,” Hei said.
Hei also said government policies should focus on reducing the price of land, increasing access to financing, and promoting economic growth that benefits all Namibians.
In addition, he said decentralisation can also help alleviate pressure on urban areas and create new opportunities for development.
