There is a Latin saying, Carpe Diem, that means Seize the Day. It can also be translated to mean you should enjoy the moment.
Having been a bachelor for more than a decade, I had never really taken this advice in literal terms of material possessions. Now that I am married and planning a family (again), I have had to re-evaluate my future plans and need to start seizing the day. This is important especially in light of my wanting to have a house with a big yard in anticipation of my soon to be born child.
I was married before, and owned at least three properties during those 10 years of matrimony. Now that I have re-married I have eagerly started the process of looking for a suitable house, one that I would be able to afford. But reality struck. I live in the City of Windhoek which has the second highest house price increases in the world.
At first, the news of the skyrocketing prices did not strike me that hard as the erven being sold by the municipality for over a million dollars were afterall in a luxurious area. They had access to most of the important services such as schools, the university, a golf course, and the western bypass. Thus I just shrugged my shoulders when I was told the prices were in millions.
Last week, I happened to go past a property I owned near the Polytechnic of Namibia and I saw a person standing in the driveway. Out of curiosity, I approached the person and found out that he was the “new owner” having bought the house some three months before. I politely enquired about the price and that is when the reality of house price increases hit me. The owner proudly told me that he had bought the house at a bargain of only N$ 240,000 compared to other houses in the area. To him the price of over 1,2 million was a bargain!
As a previous owner of the property, I sat down that night and contemplated what this price increase would have meant to me today compared to 1997 when I originally bought the property for N$260,000 from a multinational company.
At that time my salary was around N$18,000 a month and I could comfortably afford the monthly payments. I thus calculated what salary I would have to earn today for me to comfortably afford the house. I figured I would need to earn a salary of just over N$83,000 a month for me to be able to live in a similar fashion to what I did in 1997. I am sure that you must realise by now that my salary has in no way increased by that margin as the cost of the house prices today.
I now took another look at the erven auctioned by the City of Windhoek. The prices were originally listed as “upset” prices – meaning that was the minimum that the CoW wanted to get as a return for investing in the sewerage, roads, and other services. In other words, the CoW wanted to make at least the same amount of money they had spent on putting up the services, with at least a little bit of profit.
For every N$400.00 the CoW spent, they made a profit over and above the costs of around N$800.00. They responded to people’s inquiries by claiming that it was not their fault that the prices had gone up as auction caused prices to reach those levels. They claimed the prices were driven by the basic economic principle of supply versus demand. Thus there are very few erven available compared to the number of buyers, meaning that the supplier of erven can cause the prices to be pushed up by not supplying enough erven to meet demand.
*Milton Shaanika-Louw is a consumer activist and prolific blogger on consumer protection issues (http://milton-louw.blogspot.com). He serves as the voluntary director at the Namibia Consumer Protection Group.