House prices move sideways

FNB Namibia has released the housing index focusing on the month of January 2013. Namene Kalili, Manager Research and Competitor Intelligence at FNB Namibia said that historically January has always been a weak month, with very few transactions being lodged at the Deeds Office, which was closed for half the month. “The few bonds that were registered showed that house prices moved sideways from the previous month,” he added.
Central property prices continued to recover from their November low, gaining a further 1.4% in value during January 2013 due to price movements in the middle price segment. “Coastal property prices moved sideways and appear to be bottoming out of their seasonal slump. Northern house prices fell by 2.5% month on month. House prices in the southern property market fell by a further 14% mainly due to price movements in the middle to upper price segments. Land delivery was insignificant as 5 plots were mortgaged through the month, while a total 50,000m² of land was mortgaged by developers through the month, with a maximum yield potential for 120 free standing homes,” said Kalili.
The report further stated that smaller property prices fell by 9% month on month in the central area, while medium to large sized property prices increased by 6 and 1 percent, respectively. The upward price movement was due to property prices rising 6% month on month in Okahandja, while Windhoek property prices remained unchanged. Coastal property prices moved sideways after falling over the previous four months. Monitored house prices at the coast fell in the lower and upper price, while property prices in the middle price segment rose by 5% month on month. Northern house prices fell by 2.5% month on month due to weaker property prices in the upper price segment, while property prices in the lower to middle price segment improved moderately.
House prices in the southern property market fell by 14% mainly due to price movements in the middle to upper price segments. Luderitz property prices fell by 21% from the 2012 high, while Keetmanshoop property prices increased by 16%. FNB said that these figures are based on very thin volumes and are most likely to stabilise as the sample size increases during the year.With regard to mortgage advances Kalili said: “After strong mortgage growth during 2012, mortgages advances tapered during December and January 2013, thus changing the trajectory of the trend. This is mainly seasonal and the year on year growth data shows that mortgage advances grew by 13.1% from roughly the same figure in December. While mortgage advances moved sideways in the lower price segment, it’s the middle to upper price segments that are driving the growth in mortgage advances due to substantial annualised volume growth in these segments.
In conclusion the FNB housing index states that December and January are seasonally weak trading months for the local housing market and therefore volumes are always expected to weaken through both months. “But it must be said that volumes did not weaken as much as expected. January, however, was a short month and land delivery and developer activity is expected to pick up during the course of the year.”