Banks welcome revised
Commercial banks have welcomed the revised loan-to-ratio (LTV) values the Bank of Namibia (BoN) has introduced, saying these will help improve the buying power of individuals who want to acquire homes.
The central bank in 2017 introduced LTV ratios that enabled first-time homeowners to acquire a property without a deposit.
The BoN revised the ratios last week, and now homeowners can acquire a second property without a deposit as well.
Mortgage loans for third and subsequent residential properties only require a 10% deposit.
Recent economic conditions and shifts in the Namibian property market prompted these changes, it said.
Nedbank Namibia spokesperson Selma Kaulinge said the revised ratios would help make homeownership a reality for more Namibians.
“Nedbank Namibia welcomes any move to that might assist our clients or potential clients in making homeownership a reality. As this is a BoN regulation, we are mandated to establish policies and procedures to ensure adherence to the LTV ratio restrictions.”
Crucial role
The revised ratios did not present any significant risks, she said.
“LTV ratios play a crucial role in maintaining a balanced and sustainable housing market to the benefit of current and prospective property owners. In addition, they serve as a risk management tool for both lenders and borrowers, ensuring responsible lending practices,” Kaulinge said.
Bank Windhoek spokesperson Samuel Linyondi said the revised ratios would help drive the growth of the property market.
“We do not foresee any impact on operations and look forward to the impact that this might have on the growth of the property market. There is currently a lack of demand in the market for properties, and the LTV requirements will improve the situation,” he said.
The banking industry was also consulted on the revised ratios, Linyondi explained.
“The request was submitted via the Bankers Association of Namibia to the BoN for consideration,” he said.
Spur activity
“Higher deposits assist clients to have lower leverage on houses and the resultant instalment is lower. Lower deposits, however, make it possible for younger and lower-income buyers to also buy houses," Linyondi explained.
BoN deputy governor Leonie Dunn said the changes were meant to spur activity in the housing sector.
“These regulations mirror recent economic conditions which require a further relaxation of ratios, while safeguarding financial stability.
“They are designed to foster investment in the property sector, generate job opportunities and make a positive contribution to economic growth and recovery,” she said.
The central bank in 2017 introduced LTV ratios that enabled first-time homeowners to acquire a property without a deposit.
The BoN revised the ratios last week, and now homeowners can acquire a second property without a deposit as well.
Mortgage loans for third and subsequent residential properties only require a 10% deposit.
Recent economic conditions and shifts in the Namibian property market prompted these changes, it said.
Nedbank Namibia spokesperson Selma Kaulinge said the revised ratios would help make homeownership a reality for more Namibians.
“Nedbank Namibia welcomes any move to that might assist our clients or potential clients in making homeownership a reality. As this is a BoN regulation, we are mandated to establish policies and procedures to ensure adherence to the LTV ratio restrictions.”
Crucial role
The revised ratios did not present any significant risks, she said.
“LTV ratios play a crucial role in maintaining a balanced and sustainable housing market to the benefit of current and prospective property owners. In addition, they serve as a risk management tool for both lenders and borrowers, ensuring responsible lending practices,” Kaulinge said.
Bank Windhoek spokesperson Samuel Linyondi said the revised ratios would help drive the growth of the property market.
“We do not foresee any impact on operations and look forward to the impact that this might have on the growth of the property market. There is currently a lack of demand in the market for properties, and the LTV requirements will improve the situation,” he said.
The banking industry was also consulted on the revised ratios, Linyondi explained.
“The request was submitted via the Bankers Association of Namibia to the BoN for consideration,” he said.
Spur activity
“Higher deposits assist clients to have lower leverage on houses and the resultant instalment is lower. Lower deposits, however, make it possible for younger and lower-income buyers to also buy houses," Linyondi explained.
BoN deputy governor Leonie Dunn said the changes were meant to spur activity in the housing sector.
“These regulations mirror recent economic conditions which require a further relaxation of ratios, while safeguarding financial stability.
“They are designed to foster investment in the property sector, generate job opportunities and make a positive contribution to economic growth and recovery,” she said.
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