Potential home buyers to pay more
It seems potential house buyers will have to dig deeper into their pockets due to the weakened volumes through the month of March according to First National Bank.
Manager Research and Competitor Intelligence at FNB, Namene Kalili said, “Over the past two months, volumes have decreased by 71 index points, thus indicating a marked slowdown in mortgage transactions. This has translated in mortgage bonds contracting from 419 transactions in November 2013 to 290 transactions in March.”
“Most of this weakness came from the central and coastal markets where transactions volumes have come under pressure. These two markets have seen substantial increase in property prices over the past year, with property prices up 35 and 61 percent respectively and averaging N$869,000 in the central market and N$791,000 in the coastal market,” he added.
Kalili continued and said that further survey results for the first quarter indicated that willing and able buyers were dwindling as buyers struggled to afford properties at current market prices. Ninety stands were mortgaged during the month, with 13 mortgaged in the central property market, 30 mortgaged in the coastal property market, 27 mortgaged in the northern property market and the remainder in the southern property markets. Developers mortgaged a further 357,700m² of land during March, with a maximum yield potential for 835 free standing homes.
Regarding property prices he advised that central prices increased by 35% year on year to close the month at a median price of N$869,000. He added that most of the upward price pressure came from the upper price segment, where property prices increased by 35% year on year, while volumes in the upper price segment declined by 10%. Property prices in the middle price segment increased by 11% to end the month at an average price of N$1,221,000.
Despite this relatively high price tag, overall volumes grew by 41% year on year, which indicates that there is still demand for properties in this price range. House prices in the lower price segment averaged N$60,000, up 12% year on year. Year to date data shows that Okahandja prices drove central house prices up the most, registering 22% year to date price increases, while property prices in Gobabis rose by 2%, while contracting by 4% in Windhoek.