- CEO concedes that current property prices are not sustainable, but notes that the recently gazetted Sectional Titles Act is a big opportunity for emaSwati to own property.
- States that Selling Mobeni flats for sectional title purposes would be financially catastrophic to the institution
Photo Credit: www.eswatinipropertyreview.co.sz
By Ntokozo Nkambule
The Chief Executive Officer (CEO) of Eswatini Housing Board, Mduduzi Dlamini believes that Sectional Title is the key to property ownership for emaSwati. He concedes that property ownership at the present moment is beyond reach for the typical Swati, however, Sectional Title will undoubtedly make property ownership affordable for most of emaSwati. We caught up with the knowledgeable CEO at his office where he unpacked what Sectional Title really means for the country, and opined on the state of the property sector.
Q: What is your take on the current state of property prices in the country?
A: Property prices are certainly beyond the reach of the average Swati at the moment. There are a number of factors that lead to this situation. Most people aren’t aware that Eswatini Housing Board (EHB) does not receive subvention from the government. This means that when we develop a township, we inherit all the infrastructure-related costs. Also, for the longest time, Sectional Title was not operational in the country, this led to the middle class being excluded from property participation. Building material is also mostly imported from South Africa, all of these factors lead to expensive property prices. But, I believe that since Sectional Title is now operational, emaSwati will afford to own property.
Q: As a government agency, will the EHB play any significant role in the rolling out of the Sectional Titles Act of 2003?
A: We are undoubtedly the key institution that will be responsible for a number of things such as educating emaSwati on Sectional Title. Our mandate is to promote affordable housing, and part of that is to enable education and change management behavior so that emaSwati can eventually take pride in what they own. So as much as we have taken a strategic decision to develop houses and plots, educating emaSwati about what property ownership entails is still paramount. EmaSwati need to understand the commercial value aspect. In terms of Sectional Title, our biggest role is arguably the educational aspect and attempting to foster change management behavior.
“Property prices are certainly beyond the reach of the average Swati at the moment”
Q: Will EHB venture into the development of Sectional Title units of its own?
A: Definitely. We have to venture into Sectional Title development, mostly because we are the government agency responsible for housing in the country; it is important that we are seen as leading the sectional title’s development in the country. The private sector must see the successes of this new dispensation from the government itself.
Q: Will those properties you develop under Sectional Title be tailored for low and middle-income earning emaSwati?
A: Our mandate is to provide affordable housing, this means that we must tailor our offering to the lower and middle-income market. But once again, the moment we mention affordable housing it must be followed by a government subvention. There is a number of ways government can make resources available. This could be through the provision of affordable land for EHB where we would then develop and have a capping selling price. Another way would be the government subsidizing emaSwati first-time home buyers, which is a practice already in-effect in countries such as South Africa. At the present moment, we are still engaging with the government on that front, but our goal is to provide affordable home ownership.
Q: You have previously stated that you will not be selling your Mobeni portfolio. What is stopping the institution from selling the units?
A: Yes, and we still maintain that we will not be selling our Mobeni portfolio. The simple reason is that our Mobeni portfolio constitutes the majority of our revenue. Other projects that we have embarked on have not reached the level where they can fully sustain us as an institution. In simple terms, if we sell our Mobeni flats EHB will die.
This is not to water down what the public is saying, ideally we should be selling our Mobeni flats at affordable prices because our mandate calls for us to provide affordable housing. However, the biggest challenge we face is that we do not receive a government subsidy or subvention. This means that if we choose to sell our Mobeni portfolio we cannot cushion buyers, and the price will go up, that is our challenge. So the decision to sell our Mobeni portfolio should be held at a policy level.
Lastly, our mandate still remains that of providing affordable housing. Selling our Mobeni portfolio will not necessarily translate to all demographics affording to purchase the units. What is likely to happen is a situation whereby a few people purchase for investment purposes, which still defeats the rationale of what we stand for as an institution.
Q: Looking at the Eswatini market, and understanding that it is mostly a middle-income market, what do you think should be the entry-level price range for interested buyers?
A: We cannot, unfortunately, speculate on the price at the present moment, mainly because we need to take into account factors such as development costs. But I believe the first step is to look at the monthly income of emaSwati, and then calculate what they are likely to afford in repayments per month, factoring in other costs such as levies and rates. What I can caution is that let us not benchmark on other countries, but look at our own income levels, which will surely give us the price range.
Thank you very much for your time CEO
It was my utmost pleasure.
Note: This article first appeared in Eswatini Property Review and is used with permission.