WINDHOEK – Although the average age of first-time home owners in Namibia is relatively high at 41 years and these first-time buyers are few and far between, research data from one of the four commercial banks in the country indicates that the average age has declined significantly, by as much as 18 years, since the 1990s.
“Considering that we are referring to the average age of home loan clients, this decrease of ±18 years in average age over a period of 25 years may be an indication that younger people today have easier access towards owning a home of their own than in the nineties. On the other hand, there also seems to be a slight decline in older people buying additional houses for investment purposes,” commented Chris Matthee, Executive Officer: Retail Banking Services at Bank Windhoek.
According to Matthee, other reasons for the decreasing average age of home owners may include an increase in the supply of more affordable houses countrywide through various initiatives as well as banks making financing more accessible through home loan schemes concluded with employers. In addition, while the country still suffers from a severe backlog in affordable housing, Matthee feels employers providing home loan subsidies as part of salary packages, and banks introducing special financing options for first time home owners, such as zero deposits, could also be attributing to the declining age of first-time home owners.
In a recent FNB Housing Index, FNB Namibia’s Manager for Research and Development, Namene Kalili, confirmed that the average age of first-time home buyers is relatively high at 41 years. Although Kalili admitted that data was not collected on the ages of home owners prior to 2009, he suspects that the average age was high during the early 1990s given the return of Namibians after independence and bearing in mind that black people were only allowed to buy property from 1987. “Furthermore, that was round about the same time the municipal rental housing schemes were phased out and the housing stock released into the market to firstly the current occupant and then to the general public,” said Kalili.
Responding to questions from New Era, Bank Windhoek’s Matthee revealed that the average age of new home owners has decreased from the 1990s when the average age was in the late 50s, to 2001 onwards, and today the average age of their active home loan clients is in the 40s. Meanwhile, in the April 2015 FNB Housing Index, Kalili noted that house prices have begun slowing down due to weak economic fundamentals and rising interest rates, with prices contracting in the nation’s capital. “Although this brings welcome relief to aspiring home owners, supply still remains weak.
With growth in the Namibian economy expected to remain positive, driven mostly by the mining, energy, transport and construction sectors, the limited supply of new housing stock is expected to trend upwards at double-digit pace, while the interest rate hiking cycle and rising cost of utilities provide temporary price relief to aspiring home owners in 2015,” remarked Kalili.