Friday 16 April 2021
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Pay day for City

…as scramble for Otjomuise plots looms

By Mathias Haufiku

The Windhoek municipality could rake in at least N$23 million when it sells off 96 serviced plots in the newly-created Otjomuise Extension 5 township. The plots, which average around N$232 000, comes at a time when thousands of Namibians continue to scramble for any piece of land on offer due to a lack of serviced and affordable plots. The lowest priced plot is a 302-square metre on sale for N$190 260 while the highest priced is a 749-square metre plot being sold for N$471 870. With land delivery declining during the final quarter of last year, at the time the average price per square meter, according to the FNB Housing Index, was N$472 for new property coming into the market which was double the price compared to 2014. Considering the erven sizes and upset prices set for property in Otjomuise Extension 5 now on sale, a 313-square metre plot that the Council is offering for an upset price of N$197 190 would have cost you N$147 736 while a 749-square metre plot being sold for N$471 870 in the same township would have cost you N$353 528.
The closing date for applications was the final day of last month. Despite fears that the plots will be auctioned to the highest bidders, the municipality’s spokesperson Joshua Amukugo said the plots will not be auctioned off.“These ervens are being sold on offer to purchase basis which does not necessarily mean the highest bidder will get the plot,” Amukugo explained. He further explained that: “This process is completely different to the auction process. Say for instance 29 applicants apply for the same erf, we will calculate the average to determine price. We will not necessarily choose the lowest or highest bidder,” he said. Amukugo said some ervens will be reserved for previously disadvantaged people and those living with disabilities. In the offer to purchase for first time buyers, the municipality made it clear that close corporations, companies or entities will not be allowed to participate.First time buyers in the past decried the municipality’s decision to allow companies to bid for plots which they end up selling for inflated prices or built blocks of flats for rental purposes. Others have also alleged that property developers make use of shell buyers to buy the plots on their behalf.
“The City will only consider offers from first-time buyers who have never owned land  or/and have never taken land transfer in the deeds office whether it is in their own name or as members of closed corporation or as a company or juristic person in which they have acquired the majority shareholding members interest or as partners as the case will not be considered. Those who do not comply with this condition will automatically be disqualified,” warned the municipality.
Unmarried couples are also sidelined, as the City indicated that such joint incomes will not be considered in determining the affordability of the proposed purchaser.
While explaining that the Council will only allocate one erf per purchaser, it also indicated that an average between the highest and lowest offer above the upset price will be calculated as part of the  first instance of evaluating suitable offers and for eventual allocation.
The 2015 FNB Housing Index cautioned that there is little chance that the growth in prices will ease unless the national mass housing project kicks off in Windhoek and at the coast. “Our estimates indicate that up to 10,000 new houses need to be built in Windhoek alone before the median price can retract to N$400 000. This can be achieved in 24 to 36 months provided several developers are used to work on different parts of the project concurrently,” noted the index.
It further projected that prices will continue to grow by 18% every quarter with volume growth subject to availability of serviceable land and the construction of houses thereof. “Other than been fueled by poor land delivery, the price growth is also a result of increasing demand due to increase in the labour force as more students graduate.  The potential introduction of new taxes, higher interest rates and higher inflation of basic goods which will erode consumers’ disposable income pose further downside risks to this sector,” it asserted. The media house prices in major Namibian towns jumped from N$381 000 to N$800 000 in 2014.
The land and housing situation has reached crisis proportions, so much that during the launch of the Harambee Prosperity Plan, President Hage Geingob promised that through the plan 20 000 houses will be built while 26 000 plots will be serviced in the next four years.
Currently there are over 100 000 residents living in Windhoek’s Informal settlements. In view of the dire situation the president last year said government might have to expropriate farms in the surrounding areas to meet the growing demand for housing.
Expropriating farms surrounding Windhoek could prove costly to Government seeing that the farms are owned by private individuals. In 2011, there was a housing backlog of about 300,000 houses in the country.

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