Demographics of ownership
Gender discrimination in the labour market and the high youth unemployment rate needs to be tackled in order to close gaps in the housing market in Namibia.
According to Ruusa Nandago, market research manager at FNB Namibia, gender gaps in economic opportunities and wage incomes mean that women account for a smaller share of household income and are thus less likely to accumulate savings for the purchase of property.
“Furthermore, there have been concerns that millennials and young working professionals have been excluded from the housing market and may never own homes of their own owing to high levels of unemployment among this demographic.”
Single men and marriage
One of the first discoveries by FNB Namibia is the fact that single men are increasingly dominating transaction volumes.
“Historically, transactions in the housing market have been dominated by couples. The data, however, reveals that there has been a sharp decline in the number of housing transactions by this cohort since 2017 with couples accounting for only 28% of all housing transactions in the first half of 2019,” Nandago says.
She attributes this decline to changing marriage trends, characterised by an increasing number of individuals opting to marry later in life or opting not to marry at all.
Furthermore, there has been a declining trend in the number of couples choosing to marry in community of property and consequently less couples registering joint bonds.
This is a strategy which provides some relief in terms of affordability, as it allows individuals to own two properties which can be registered as primary residences, for which no deposit is required.
According to Nandago, single men are now the fastest growing group of home owners, accounting for 42% of total transaction volumes.
“At 30%, the proportion of transaction volumes by single women lags that of single men which is a clear indication of a gender gap in the housing market.”
A second discovery has been the fact that single women purchase lower priced homes than single men.
“The gender gap in the housing market is further corroborated by gender differentials in the average house price of homes purchased. The data shows that single women have consistently purchased lower priced homes when compared to single men,” Nandago says.
On average the price of a home purchased by a single woman is 11% lower than that purchased by a single man. In the first half of 2019, the average house price for single women was recorded at N$941 008, while that of single men was recorded at N$1 024 138.
Furthermore - when looking at house size, the average house size is the smallest for single women measured at 493m² in the first half of 2019, followed by single men’s houses measured at 607m² and couples’ houses measured at 639m².
The average house size for single women being lower than that of men is unsurprising given that single women purchase lower priced houses than men, Nandago says.
The FNB report also shows that the gender gaps in the housing market mirror the gender gaps in the labour market and goes on to prove that the descriptive analyses reveal a clear gender gap in the Namibian housing market. This gap is consistent with gender gaps in the labour market pertaining to employment status and earnings, according to Nandago.
According to the 2018 Labour Force Survey, women have higher rates of unemployment at 34.3% compared to men whose unemployment rate is 32.5%, despite making up 51.4% of the population. Furthermore, women earn a lower monthly mean wage of N$7 789 compared to the mean wage of N$8 052 for men.
Nandago goes on to say that the average age of a home buyer in Namibia shows a declining trend and the average age has come down to 38 years old, the lowest it has been in 9 years.
“When compared to other jurisdictions, Namibians buy their houses at a much later stage in life. The average age in the UK, for example, is much lower at 30 years while the average age in the US is 32 years old. Interestingly, the average age for single women home buyers (35 years) is slightly lower than that of men (37 years).”
Not surprisingly it is also revealed that the youth have low participation rates in the housing market.
The bulk of housing transactions are done by individuals in the 30-39 age group (49%), followed by individuals in the 40-49 age group (28%), then by individuals in the 20-29 age group (14%), then individuals in the 50-59 age group (8%) and finally individuals over 60 years old (1%).
“The ultra-low housing market participation rate of individuals in the 20-29 age category is unsurprising, given the high levels of youth unemployment across the country,” Nandago says.
Lastly it is stated that individuals over 60 buy the biggest houses.
“Individuals in the 20-29 age group have the smallest sized houses, which we attribute to the fact that these are first time buyers who have not accumulated sufficient wealth to buy larger properties. The size of a house becomes increasingly larger as individuals move into higher age groups.
“Surprisingly, however, individuals in the over 60 age category buy the biggest houses in terms of size although they make up the smallest proportion of home buyers. Typically, it would be expected that individuals in this category downsize their houses as they prepare for retirement,” Nandago says.
Nandago concludes by adding that the Namibian labour market was characterised by gender inequality and age gaps.
“Data from the FNB House Price Index also shows that disparities in employment and income according to gender and age are realised in the housing market. These are observed when looking at the number of transactions, the price of houses and the size of the house stand purchased.
“Owning a home fulfils the basic human need for shelter and a house is likely to be the largest asset owned by a household for wealth accumulation. It is of utmost importance that individuals of different groups have equal access to housing as this improves their quality of life.
“It is therefore necessary to address issues of gender discrimination in the labour market and the high youth unemployment rate in order to close these gaps in the housing market,” Nandago says.