Property market expected to remain weak due to depressed economic environment
According to the latest FNB House Price Index, the subdued economic environment has continued to cast a pall on house prices, as the Index contracted by 3.7% at the end of June 2019 compared to a contraction of 2% over the same period last year.
The poor showing in the index is the worst performance recorded since 2009 and comes on the back of price contractions across all four regions in the country. According to the index, the contraction brings the average national house price at the end of June 2019 to N$ 1,066,908, which is similar to the mean price recorded in February 2016.
FNB Namibia’s Market Research Manager Ruusa Nandago said the property market is likely to remain suppressed given the depressed economic environment, the precarious unemployment situation and anaemic consumer spending.
“We therefore expect the housing market to remain in the red, with any improvements are likely to be slow and gradual. We are of the view that a turnaround in the economy that will bolster real wage growth and consumer spending is the vital catalyst that is will place growth in the property market on a stronger footing,” Nandago said.
Property prices in central Namibia showed a contraction of 6.1% at the end of June 2019 compared to a growth of 0.3% observed over the same period last year, bring the average house price down to N$1.4 million compared to N$1.5 million recorded over the same period last year.
Meanwhile, the Coastal region is the weakest performer with property prices showing a deeper contraction of 11.4%, bringing the average house price in the region down to N$1,025,000 from N$1,157,000. The Northern and Southern regions contracted by 6.5% (average house price N$822,000) and 5.1% (average house price N$832,000), respectively.