Namibia’s Central Bank, on Wednesday, announced it is further easing home loan curbs to revitalise the country’s long-depressed housing and construction sectors.
Dampened credit extension to the property market compounded the depressed growth.
The bank predicts GDP growth will fall to three per cent this year, down from 4.6 per cent in 2022.
Poor performance of the construction industry negatively impacted the GDP growth.
“These developments compelled the committee to reconsider existing loan-to-value regulation.
“We implemented the regulation as a macro-prudential tool to contain speculative behaviour in the housing market,” the bank said.
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The central bank announced in 2017 that home buyers in Namibia would require larger deposits for second and subsequent properties. This is to curb speculative buying.
The bank set the loan-to-value ratio for a second residential property at 80 per cent of the purchase price or market value.
But commercial banks backed 70 per cent to 50 per cent of third and subsequent loans.
The central bank also prohibited homeowners from utilising 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 per cent on third and subsequent properties. (Xinhua)
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