FNB House Price Index records double-digit growth for the first time since 2016
The performance of the housing market continues to be underpinned by supply-side factors such as shortage of affordable properties coupled with fierce competition among banks in keeping mortgage rates as low as possible, according to FNB Market Research Manager, Frans Uusiku.
According to Uusiku from a segment perspective, the large housing segment recorded the highest quarterly growth of 8.3% y/y in prices, compared to a contraction of 9.2% y/y recorded this time last year.
“On a quarterly basis, an average house in the large segment is now estimated to be selling at N$4,392, 000 based on incoming sales data. As the case has been elsewhere, the added boost in sales activity in this segment may appear to suggest increased competition for high valued properties by those with adequate access to funding,” he said.
“On the other hand, the small housing segment landed the second-highest position in terms of quarterly house price growth of 5.3% y/y. In contrast, the luxury segment recorded a contraction in quarterly house prices of 3.2% y/y, which could be attributed to the inherent affordability issues”.
Uusiku said the Namibian housing market appears to be at an inflection point, where pent-up demand and low-interest rates are expected to keep sales activity at elevated levels as the economy continue to recover.
“ On the downside, however, economic confidence may also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage” concluded Uusiku.