By Donna Collins
WHILST the Swakopmund property market is poised to become the most sought after and most expensive real estate address in Namibia, sales over the past few months have nearly ground to a virtual standstill.
Considering the massive increase in property prices this year, which has seen average homes jumping into the just under N$3 million category, and well over, estate agents are starting to feel the economic pinch.
In fact “the feast is over”, and gone are the days when one could snap up an affordable coastal property for a song. Whilst buyers entering into the coastal property market today have had to brace themselves for prices that in some cases, are not even that much less expensive than Windhoek.
In its most recent housing index First National Bank (FNB) Namibia noted that prices in Swakopmund have increased substantially during 2016 by a whopping 42.26 percent q-o-q as compared to Walvis Bay’s 3.36 percent. This is against the backdrop of Windhoek’s growth of 20.73 percent, and prices in the North which only saw an 8.3 percent growth.
The index report also started that the price hike in Swakopmund emanates mainly from a property explosion in Extension 10, Extension 15 and the Rossmund area, where prices increased substantially since last year, pushing the overall prices higher throughout 2016.
Just browsing through the websites of the many estate agencies who are competing for a sale with an unlimited option of flats, townhouses and houses on their books, you won’t be disappointed. If it is a high end property you are looking for then Welwitschia Estates has a three-bedroom house in Kramersdorf going for N$6.4 million and even a Vineta beachfront home for N$8.2 million.
Not to be outdone, Nels Estates can offer you a sea facing penthouse for N$5.8 million or even an erf in Vogelstrand for N$3.4 million, because not even stands are cheap these days.
But just because the prices are high, this doesn’t equate to good sales. And the overall trend points to a lowering in the housing demand as consumers remain jittery about the property market due to rising inflation, rising interest rates, and slow income growth which impacts on spending.
Confidente spoke to a number of key property agents in Swakopmund who despite saying “business is dead”, tried to remain positive.
But the attitude “it’s going to get worse before it gets better”, from top estate agent Brian Basson of Daphne Swanepoel Properties, could be taken as a voice of doom, if it wasn’t for the fact that they had just clinched a deal for a Mile4 property which went for N$3.3 million.
Another seasoned estate agent Diane Esterhuizen said that the “the bubble is not going to burst”, adding that Swakopmund will always be in demand.
Saying that their high ticket homes are still selling for cash, she confirmed that while the market is sluggish, this also points to the dwindling South African clientele due to the visa restrictions, the negative effect of the drought, and the banks which are sticky with loans applications whilst requiring a 10 percent deposit on the transaction.
Jana Grunschloss of Capricorn Estates said that people are struggling to get loans, and because of the steep property prices, houses can stand for long periods before they sell.
She also said that more people are looking to rent, but this market also comes with its problems, due to supply restrictions, and unaffordable rentals for the man in the street.
“The situation remains quite desperate and it is a catch 22 because everyone
is affected,” she said, pointing out that they have properties on their books to rent as high as N$25 000 a month “because landlords can ask what they want”.
Confidente. Lifting the Lid. Copyright © 2015