House price monster unrelenting
House prices continued their upward trend in June despite increased volumes, the FNB Housing Index shows.
On an annual basis, the FNB House Price Index rose 19% in June despite an increase in volumes in the middle and upper price segment while on a monthly basis the index grew by 5 basis points to 155 basis points. FNB attributes the increase in volumes largely due to increased construction activity across the country, which grew by 11%.
FNB says the continued increase in prices is pushing first time buyers out of the market resulting in fewer buyers in their twenties (13%). There is, however, hope as land delivery has begun to increase along with increased developer activity. In the month under review, developers mortgaged 159,000m² of land capable of yielding a maximum of 420 houses.
Central property prices increased a further 5% month on month after an 8% increase in May. This accelerated the year on year growth of central house prices from 11% in May to 18% in June. House prices have now increased to N$660,000 on average from the January low of N$562,000. Year to date data shows that house prices in Gobabis and Okahandja continued to grow by 18% and 31%, respectively. House prices in Windhoek rose 5%, having been slightly negative to flat over the first five months of 2012.
Volumes in the lower price segment remained weak and are down 7% month on month and down 13% year on year. Volumes in the middle and upper price segment increased 23% and 14% respectively on an annualised basis. Volumes were boosted by strong construction growth in the middle to upper price segments.