Less units, prices rise again
While the volume index declined by 15% for the final quarter of 2015 the value index increased by 21% quarter on quarter. The national median price for 2015 increased to N$800,000. The growth in value continues to be a factor of declining volumes [in housing] across the country said Daniel Kavishe, the compiler of the FNB Housing index.
“At the end of the fourth quarter we found that central property prices grew by 26%. The median prices for the three main towns are now Windhoek N$1.2 million; Okahandja N$790,000 and Gobabis N$780,000.
Volumes in the central region dropped during the fourth quarter by 22% as a result of fewer registered transactions in December. Academia prices have doubled since last year mirrored by relatively fast growth in Elisenheim and Kleine Kuppe. However, prices in Okahandja are growing much slower than in Windhoek due to availability of serviced land and with lower demand in the town than in Windhoek. Prices in Gobabis grew by 24%.
Coastal volumes have shown a substantial decrease in the fourth quarter, declining by 10% as a result of the slowdown in transactions in Walvis Bay, Swakopmund and Hentiesbaai. The median price in Swakopmund remains at N$875,000, Hentiesbaai N$1 million and in Walvis Bay N$795,000.
Prices in Ondangwa have tripled over the past year with the median price now at N$650,000, an almost 22% increase. Volumes however were down by 18% in December as a result of fewer transactions in Ongwediva and Oshakati.
Prices in Oshakati have further declined by 28% according to the median price recorded at the end of December. A further slowdown in growth in prices as new developments come on-stream can be expected in 2016. Ondangwa and Ongwediva however will continue to have a robust housing market environment, according to Kavishe.
“Looking at the South most towns continue to have minimal transactions recorded every month. Median prices however increased to N$698,000.
“Having reviewed the prices in 2015, there is little chance that the growth in prices will ease unless the mass housing project really kicks off in Windhoek and at the coast. Up to 10,000 houses need to be built in Windhoek alone before the median price can retract to N$400,000. Prices will continue to grow by 18% every quarter with volume growth subject to availability of serviceable land and the construction of houses thereof.”
“The biggest risks to the housing market this year is the potential slowing of demand due to increased taxes, higher interest rates and higher inflation of basic goods which will erode consumers’ disposable income” he said.