WINDHOEK – Windhoek’s land auction yesterday for first-time buyers recorded perhaps one of the highest prices paid per square metre, with bidders dishing out as much as N$2 300 per square metre.
The prices not only surprised house market experts, they also prompted the Swapo Party Youth League (SPYL) to appeal to the “next parliament” to enforce Cabinet’s standing decision that urban land not be auctioned “to the highest and richest bidder by implication”.
The high auction prices come three weeks after First National Bank (FNB) Namibia’s house index report pitched Namibia’s property market second in the world after Dubai.
The Windhoek Municipality auctioned 50 erven yesterday to first-time buyers, some of whom paid as much as N$1.3 million for a 513-square metre plot of land in Academia.
Many buyers hope to construct a home on the land, which according to the municipality’s standards should be worth nearly four times the value of the land.
For this auction the city fathers teamed up with the luxury Fine and Country Real Estate, Old Mutual and a relatively unknown outfit called Betula Nigra Investment Company.
The prices surprised even one of Windhoek’s expert voices on the property market – Namene Kalili, Manager for Research and Competitor Intelligence at FNB, who told New Era yesterday that the prices reflected at the auction were “pretty extreme”.
“It is a lot, one would find it difficult to find countries where erf prices [per square metre] fetch that much,” Kalili said, but was quick to add that the money paid at the auction reflected the dynamics of the current property market.
His expectations were that prices would fetch about N$1 500 per square metre.
SPYL secretary Dr Elijah Ngurare said the league’s stance on the auction of land remains.
“Our view is unapologetic and clear, namely that land must be affordable to the youth especially the young professionals, many of whom have just started work. This is for all authorities and not only Windhoek,” Ngurare told New Era from Luanda, Angola, where he is attending a conference on liberation movements.
The auction left first-time buyers languishing in disbelief and gasping for air, as the auctioneer announced bids from a base of N$800 000, at one point going as far as N$1.2 million, carried away by his own pace, only to return to N$900 000 and continue announcing bids to above a N$1 million again, as many of those in attendance walked out of the Aucor auction hall in Prosperita, one by one, having given up while the auction was still ongoing.
“The only real inheritance that is sustainable is land, both in urban and rural areas. We appeal to the next parliament to actualise this call. We request in this connection for all youth to vote Swapo Party and its presidential candidate to win resoundingly in order to make this possible,” Ngurare added.
The FNB house index of three weeks ago found that house prices “increased by 29 percent year-on-year to bring the First National Bank (FNB) house price index to 234.7 index points through June as house prices continue to increase in 2014 at a much faster pace than the long-term trend over the past seven years,” the report said then.
Kalili added then that despite various policy interventions to increase new housing supply, volumes continued to trend downwards as fewer properties were traded from month to month and demand for properties continued to increase.
“It is this increased disparity between supply and demand that is driving house prices upwards so much so that Namibia had the second highest house price increase in the world after Dubai.
“At a median price of N$774 000, households must earn at least N23 000 per month to afford an average property. This is almost three times the average household income for urban households in Namibia.
“Based on our calculations, the income requirement for the lower price segment came in at N$15 000 per month. Less than 10 percent of households in the country can afford a property in the lower price segment,” the report said then.