House Index down briefly
FNB Namibia’s latest house price index for the third quarter of last year shows a surprising decrease in house price across the lower and middle categories. As a result, the overall index fell by 6.5% but the index compiler expects this to be of short duration. House prices came down as a result of improved volumes of new housing units entering the market.
Namene Kalili, Manager:of Research and Competitor Intelligence at FNB Namibia said: “Supply has begun shifting towards the middle to lower price segments, where Namibian Housing Enterprise (NHE) delivered new housing stock in Otjomuise and Kuisebmund, which lowered the median house price for October. But, one month does not cause a trend and therefore increased supply of new housing stock in the middle to lower price segments over a few more months is required to sustain the decline in the median house prices. Unfortunately there was very little evidence of increased affordable housing in the near term and thus the October house prices were merely a temporary relief.”
Regarding central property prices, Kalili said these fell for the first time in seven months due to the Otjomuise development which added 9% to total volumes traded in the central market.
However, year to date house prices in Windhoek continue to increase, but at a slower pace than last year’s third quarter. Okahandja property prices have risen 28% year to date and Gobabis price are up 18% year to date.
On the topic of coastal property prices, Kalili advised that these usually slump during the third and fourth quarters and therefore the 6.3% month on month decline during October was hardly surprising, with increased housing delivery contributing to the decline. “This was particularly evident in Walvis Bay where property prices remain well below the national average at N$410,000. Year on year data shows that Henties Bay property prices have increased by 17% and Swakopmund property prices have increased by 16% year to date. According to the report, both towns have some of the highest median property prices in the country.
Northern house prices increased by 13.2% month on month and this was due to an increase in the house prices in the lower price segment on the back of weak volumes. In the north, volumes continued to increase in the middle to upper price segments, leading to lower prices.
Year to year data shows that Eenhana, Grootfontein, Omaruru, Ondangwa, Oshikango and Otjiwarongo were responsible for the rising house prices in the northern property market.
“In contrast house prices in the southern property market fell for the second consecutive month, this time by 21%. House prices in this market are erratic due to the limited data points or transactions. Property prices fell in Lüderitz, where the year to date growth figure was over 100% last month and is now down to 85%. Aranos property prices also contributed to the decline, while Keetmanshoop property prices remained flat,” explained Kalili.
The FNB House Price Index indicates that volumes continue to grow due to various new developments taking place across the country. “This is positive for the housing market as it closes the gap between demand and supply in a market which has been undersupplied for quite some time. Unfortunately there is very little evidence to suggest that this will develop into a trend, since land delivery remains very weak. Over the medium to long term however, developer activity looks very promising and the October figure could deliver as many as 1,900 new homes. Therefore volumes should increase consistently in the medium term and have a stabilising effect on house prices.”