We will not beg for home loans – Shaningwa
Windhoek and Walvis Bay
Minister of Urban and Rural Development Sophia Shaningwa has once again urged commercial financial institutions to come to the table to assist low- and middle-income earners by financing alternative construction methods in the country.
Shaningwa made the call in light of the fact that property prices in the country have skyrocketed since 1990 due to a sharp increase in demand.
While government has scrambled to mobilise domestic savings and affordable credit to finance housing and property developments, senior government officials have called for more public-private partnerships to support social housing using alternative building materials and techniques to provide affordable housing.
Shaningwa was speaking at the official handover of 44 erven to 22 contractors for the construction of 44 show houses at Walvis Bay on Friday.
The idea is to choose the most suitable alternative building method and the show houses will enable homeless and landless residents at the town, who are on the waiting list, to view the houses and choose what best suits their pockets.
However, shortly after urging the financial institutions to step up to the plate, Shaningwa said that she would no longer beg reluctant financial institutions to finance alternative building methods, or to give mortgages to middle- and low-income earners, as there is another option.
“When I say financial institutions I mean our banks, Standard Bank, Nedbank, First National Bank and the SME Bank, among others. If you are not prepared to assist low and middle-income earners with home loans, I will not beg you anymore.
“I was already consulted by people with capital to help finance such houses. All we need to provide is land and clients for them. We will gladly make use of them if you don’t [want to assist]. Our people need houses and with or without your assistance we will provide affordable houses,” Shaningwa charged.
Responding to questions from New Era, three of the commercial banks in the country have confirmed that they provide financing for alternative building methods and have dispelled as a myth the claim that they only provide home loans for properties above N$250 000.
FNB Namibia said their minimum home loan is N$100 000 and confirmed that they currently finance five alternative building methods. These methods include ACS (a steel-frame concept with cladding and plastered finishing of the walls); Tutungeni Precast Concept (precast concept finished off with normal plastering); Wispeco Concept (insulated panels incorporated with steel and finished off with plastering); Kavango Block Brick (hollow block brick concept); and the Moladi Concept (lightweight plastic formwork mould filled with aerated mortar).
Bank Windhoek said it understands that housing is a critical need in the country and thus considers alternative building methods, especially where there is cost savings on construction.
“When considering alternative building methods, the bank looks at durability (how long this structure will exist for with no deviation in value), movability (the structure must be permanent with no possibility to move it to another place), cost savings on construction and where this building method were used successfully.
“The developer must provide us with accreditation certificates and the building method needs to be approved by an organisation such the South African Bureau of Standards (SABS) or the Namibia Standards Institute (NSI),” said Bank Windhoek executive marketing and corporate communications officer Jacquiline Pack.
Pack further noted that certification must be done by qualified professionals, like engineers, who will also need to certify the quality of construction after financing has been provided.
“In many cases savings are normally on the construction period, while we look at the actual costing,” Pack added.
Standard Bank Namibia’s home loans sales manager, Caroline Orange, explained that the minimum home loan the bank finances is N$150 000 for ordinary loans and N$100 000 for a scheme account, where collateral (surety) from the company is in place.
“The only alternative building method that we currently finance is the ‘lightweight steel frame’ building method. However, we are open to other alternative methods, subject to credit approval,” she said.