Favourable environment to invest in property

27 September 2021 | Business

Frans Uusiku; Market Research Manager FNB; "Affordability is expected to remain challenging as the labour market is still reeling from the impact of Covid-19 pandemic."

Windhoek ∙ [email protected]




Namibia is currently in a buyers’ market, making it a good time to invest in a property or a dream home.

According to Frans Uusiku, First National Bank (FNB) market research manager, the record-low mortgage rates and shortage of inventory are keeping the Namibian housing market strong, with pent-up demand building up in almost every region of the country.

The FNB house price index is up by 9.6% year-on-year at the end of June 2021, following a contraction of 1.0% year-on-year over the same period in 2020.

Consequently, the national weighted average house price came in much stronger at N$1 286 908, compared to N$1 042 852 seen in a prior year. These trends mirror the considerable increase in mortgage sales across the board with a relatively high growth impact coming through from the medium and large housing segments, Uusiku pointed out.

On a three-months basis, the medium and large housing segments contracted by 0.7% and 4.1% year-on-year to N$2 146 000 and N$4 045 000 at the end of June 2021, respectively. These dynamics reflect the emergence of cyclical forces such as distressed property sales induced by weak economic conditions and affordability issues.

Indeed, sales of homes within the medium and large housing segments soared by 34.9% and 53.4 year-on-year over the review period compared to contractions of 20.5% and 1.7% recorded a year earlier.

On a more positive front, green shoots in house price growth were observed within the small and luxury segments, registering growth of 7.1% and 95.3% year-on-year, respectively. This points to the resilience of these segments from a demand and affordability perspective. Suffice to say, a house in the small segment tend to sell quick, averaging about one to four months in the market, if reasonably priced.

Although this market has been dormant in the recent past, the stark reality is that it represents a beacon of hope for the masses in Namibia, as far as accessible housing is concerned. The northern and central regions were responsible for most of the deals concluded in this segment, accounting for 38% and 37%, respectively, he said.

Regions

The central residential property price index edged up significantly to 29.3% in June 2021 compared to a contraction of 10.2% recorded a year ago. This is the highest growth level reached since July 2011.

Overall, the average selling house in the central region is now recorded at N$1 630 000 compared to N$1 261 000 a year ago.

Looking ahead, demand in this region is expected to remain shored up, considering the ongoing property developments in Windhoek, such as the Ongos Valley, Goreangab and the informal sector upgrading project, Uusiku said.

In addition, the coastal residential property price index reached a 10-year record high of 44.0% year-on-year at the end of June 2021. On average, a house in the coastal region is now priced at N$1 583 000 compared to N$1 099 000 recorded a year ago.

“We view the market for holiday houses to be gaining momentum now, more than ever, as many organisations adopt flexible or remote working arrangements.”

Furthermore, the northern residential property price index recorded a moderate growth of 1.0% year-on-year in June 2021, reflecting a decrease of 7.1 percentage points from the previous year.

Overall, an average house in the northern region is now priced at N$876 000, which is slightly higher than the N$867 000 recorded in June 2020, Uusiku added.

Lastly, the southern residential property price index on the other hand has fared well in the recent past, recording growth of 5.1% year-on-year in June 2021 compared to a contraction of 5.5% seen in June 2020. On average, a house in the coastal region is now priced at N$826 000, representing a significant increase of 5.1% on an annual basis.

Although the economy remains in a relatively weak position, the housing market is showing some signs of a return to normal.

However, affordability is expected to remain challenging as the labour market is still reeling from the impact of Covid-19 pandemic, Uusiku concluded.

Similar News

 

Eat, drink, travel and be merry

2 days ago - 26 November 2021 | Business

Even in this struggling economy with global supply chain constraints, retailers are expecting strong sales from Black Friday specials and this has extended far beyond...

FirstRand launches FirstJob internship programme

3 days ago - 25 November 2021 | Business

FirstRand Namibia launched the FirstJob internship programme in line with the group’s purpose and broader Namibian talent development drive, and especially towards starting to address...

O&L awards Value Stars

2 weeks ago - 11 November 2021 | Business

The Ohlthaver & List (O&L) Group recently hosted their Value Star Awards for the 2021 financial year.The annual awards ceremony celebrates the O&L employees from...

Putting customers on the map

1 month - 23 October 2021 | Business

As part of its strategy of putting its customers first, Paratus Namibia launched its new map coverage function to make it easy and quick for...

Hileni Tjivikua is on a mission to create safer...

1 month - 17 October 2021 | Business

Windhoek • Rivaldo Kavanga Hileni Tjivikua began her journey as the managing director of the Automobile Association of Namibia (AA Namibia) in 2014 and...

Take a gap with The Dome

1 month - 06 October 2021 | Business

Swakopmund • Leena Ndakevondjo The Dome Academies offer various programmes to help school leavers unleash their full potential. These include a Gap Year...

Magic Discounters word gesloop

1 month - 05 October 2021 | Business

Walvisbaai • [email protected] Drie maande ná ’n brand Magic Discounters in puin gelê het, bly die gebou op Walvisbaai nog steeds ’n hoop verkoolde...

Submissions open for Hollard Sport Awards

1 month - 01 October 2021 | Business

Staff Reporter Lockdown and the limitations on gatherings and events have driven those in the sports marketing and promotional space to have to adapt, digitise,...

Incentives for exploration, drilling

1 month - 01 October 2021 | Business

Memory Mbai As with many other African countries, Namibia offers important indirect tax incentives to promote the exploration and drilling for oil...

Namibia ready for more local growth

1 month - 30 September 2021 | Business

Windhoek ∙ [email protected] The national campaign to buy local and grow the Namibian economy has entered its second phase and according to the minister...

Latest News

Elevate with the new 2022...

1 day - 27 November 2021 | Motors

The Lexus ES has enjoyed three decades of success in the mid-size sedan category and is now forging a more ambitious path with its seventh-generation...

TopCheri details new album ‘Dual’

1 day - 27 November 2021 | Art and Entertainment

Windhoek • Micheal Kayunde TopCheri is ready to bless our ears with her forthcoming album. The 17-track offering features appearances from Kalux, Page (Ethnix),...

Spotlight on Shark Island

1 day - 27 November 2021 | Opinion

It was on this fateful day, 2 October 1904, when German imperial genocide general Lothar von Trotha declared genocide against the Ovaherero people, and extended...

Less than three weeks of...

1 day - 27 November 2021 | Education

The last school day for pre-primary and Grade 1 to 10 learners will be on l5 December 2021. The grade 11-AS and grade 12...

80% of Namibians unvaccinated as...

1 day - 27 November 2021 | Health

Windhoek • [email protected] Namibia is always concerned about the presence of viruses, in whatever form - and especially when 80% of the population is...

Fuel price to increase with...

1 day - 26 November 2021 | Energy

Andreas Simon the senior public relations officer of the ministry of Mines and Energy, announced that the ministry had completed the fuel price review for...

Eat, drink, travel and be...

2 days ago - 26 November 2021 | Business

Even in this struggling economy with global supply chain constraints, retailers are expecting strong sales from Black Friday specials and this has extended far beyond...

Ford's hot new Ranger finally...

2 days ago - 26 November 2021 | Motors

After months of teasers, Ford has finally revealed its all-new Ranger. By far the most crucial product that Ford produces, and for markets like Southern...

Rebirth planned for tourism sector

2 days ago - 26 November 2021 | Tourism

Swakopmund • [email protected] About 18 months after the corona crisis brought the tourism industry to its knees, government is in the process of developing...

Load More