Northern property market experiences record volume growth

The FNB House Price Index increased 2.8% month on month for September last year, lifting the year on year price movements to 2% in nominal terms.
A change in the mix of properties traded is contributed to this downward pressure in prices, in real terms, i.e. after stripping out the effect of inflation.
Increased supply in the coastal markets lower price segment and the northern property markets’ middle to upper price segment exerted downward pressure on overall house prices. Overall volumes continued to grow through September up 3% from the previous month and up 33% year on year.

The northern property market experienced record volume growth, with volumes up 90% year on year. Volumes in the northern property markets middle price segment was up 304% over the past year, and the volume of entry level coastal homes was up 82%. However, land delivery across the country was weak with only14 stands mortgaged through the month.
The FNB Housing report stated that central property prices increased 9% month on month, but remained 3% below 2012 levels in nominal terms.
 Over the past year, house prices in the middle price segment have contracted by 7.4%.
As for the lower and upper price segment, prices have increased by 1.7% and 6.2% respectively.
There was a 13.8% year on year increase in the number of properties mortgaged in the central property market due to the increased number of existing properties in the upper price segment, with volumes up 27.4% year on year.
 Land delivery remained weak in the central area, with a single stand mortgaged through the month for N$194/m², 65% higher than the August average.
 Developers mortgaged 19,500m² of land during the month, with a maximum yield potential for 45 free standing homes.
Northern property prices rose 4.5% month on month, with property prices in the middle and upper price segments rising by 2.1% and 5.9% respectively. This brought the year on year price movement to 26.1% on the back of the 20.1% price growth in the upper price segments and a 304.3% volume increase in the middle price segment. The annualised price movement in the northern market was the result of double digit price inflation in the upper price segment coupled with strong volume growth in the middle price segment.
Developers mortgaged 7,300m² of land, the report stated.
According to the housing report, land delivery continued to move sideways at very low levels.
Land delivery was weak for the central property market. One stand was mortgaged for N$194/m²,10 stands were mortgaged at the coast for N$62/m² and two stands were mortgaged in the northern property market for N$64/m².
A further 44, 320m² of land was mortgaged through the month, a total of 6,886 free standing homes for 2013 to date,184% higher than the same period last year.
Central bank data shows that net mortgage advances grew 13.1% year on year through September with N$249million worth of mortgages advanced.
The deeds data shows that gross mortgage advance was fueled by mortgages extended to properties in the middle price segment accellerating 40.3% year on year.
Mortgages to the lower price segment increased 16.9% because of rising volumes traded and rising house prices in the lower price segment.
Mortgages extended to the upper price segment grew 11% year on year, however, 63.7% of all mortgages were extended to the upper price segment and concentration of mortgages remains high in the upper price segment.
Namibian property prices spiked towards the end of 2012, when the country had the 4th highest house price inflation in the world.