WINDHOEK, July 14 — Namibia’s central bank announced Wednesday that it is further easing home loan curbs to revitalize the country’s long-depressed housing and construction sectors.
The Bank of Namibia said the construction sector had experienced lengthy periods of depressed growth, compounded by dampened credit extension to the property market.
The bank predicts that GDP growth will fall to 3 percent this year, down from 4.6 percent in 2022, impacted by the poor performance of the construction industry.
“These developments compelled the committee to reconsider the existing loan-to-value regulation, which was implemented as a macro-prudential tool to contain speculative behaviour in the housing market,” the bank said.
The central bank announced in 2017 that home buyers in Namibia would be required to put down larger deposits for second and subsequent properties to curb speculative buying.
The loan-to-value ratio for a second residential property was set at 80 percent of the purchase price or market value, whereas commercial banks backed 70 percent to 50 percent of third and subsequent loans.
The central bank also prohibited homeowners from utilizing the equity in their first house to purchase a second.
The limits were later relaxed in 2019 when the bank announced that home buyers would only need to put down 20 percent on third and subsequent properties. (Xinhua)
