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NHE switches to aggressive land acquisition 

2022-07-20  Maihapa Ndjavera

NHE switches to aggressive land acquisition 

To deal with the challenge of inadequate capital and availability of affordable and serviced land, to provide houses as per its mandate, NHE is looking to private partners to boost the number of houses it is delivering.

The state-owned Namibia Housing Enterprise (NHE) is mandated to deliver housing to low- and middle-income Namibian households by undertaking and financing housing projects. 

The entity has built fewer than 900 houses since 2016 while the national housing backlog stands at over 300 000.

Responding to questions from New Era, NHE spokesperson Tuafi Shafombabi said with the challenge of inadequate capital, NHE has embarked upon the initiative of entering into smart partnerships with private financiers in order to deliver houses, part of which are loaded onto NHE’s loan book.

“NHE has also come up with an aggressive stakeholder engagement plan with local authorities to obtain more land to deliver on its mandate,” stated Shafombabi.

Furthermore, the housing entity received recapitalisation from government amounting to N$110 million from 2016 to date. With this amount, they only managed to provide 896 houses from 2016 to 2022 in different towns. 

The houses were constructed in Oshakati (200), Rundu with 122, Windhoek has 102, 78 in Outapi, 77 in Keetmanshoop, Karibib (72), Omuthiya has 70, veterans houses are 66, Okahao (50), Okakarara has 40, Ongwediva (10), Swakopmund (5) and Omaruru (4).

To clear the backlog of 300 000 houses over the next 10 years, more than 30 000 housing units are required per annum in Namibia. One of the solutions presented is effective public private partnerships that can help re-build the local construction sector capacity and stimulate linkages with the manufacturing sector.

However, FNB Namibia residential property report for the first quarter of the year stated the ongoing aggressive hiking of interest rates at a time inflation is at elevated levels bode ill for credit appetite. 

“This is creating a hasty slowdown in the demand for mortgage loans and homeownership in general. In effect, the volume index growth dropped drastically on a 12-month rolling basis to -1.7% at the end of March 2022 from 16.4% seen over the corresponding period of 2021,” reads the report.

As a result, the 12-month national weighted average house price came in at N$1.2 million at the end of March 2022, up from N$1.1 million in the corresponding period of 2021.

The bank is of the view that solving access to land and affordable housing through land delivery would require the institutionalisation of a public private partnership mechanism. 

It warned rising interest rates, unyielding inflation and record low inventory of affordable housing would continue to upend the housing market in Namibia, keeping prices higher and worsening affordability. 

It advised lending institutions to re-evaluate their views on credit risks and housing affordability across different price points in the face of the current uncertain macroeconomic environment.

Meanwhile, the World Bank, through the Namibia Country Private Sector Diagnostic (CPSD) is of the view that NHE could potentially contribute more toward meeting the demand for formal housing.

The bank noted that an opportunity exists for NHE to expand its housing delivery contribution through a better-focused strategic approach such as the development of strategic partnerships, including public private partnerships (PPPs) to recapitalise existing and finance new housing projects.

However, such an approach, the World Bank said, would require interventions for NHE to enhance the delivery of housing through its programmes.

The bank’s diagnostic added that public sector efforts to develop mass housing have not been successful to date. The mass housing programme was intended to deliver 185 000 houses at a rate of over 10 000 a year between 2013 and 2030 through co-financing with the private sector.

The CPSD’s objective is to identify near and medium-term reform opportunities to revitalise the private sector and help reposition Namibia’s growth on a green, resilient, and inclusive trajectory.


2022-07-20  Maihapa Ndjavera

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