House prices soften

Residential property report highlights

09 September 2020 | Infrastructure

The second quarter FNB Residential property report highlights the fact that the House Price Index was down 2.7% from the second quarter of 2019 to the second quarter of 2020, while the national weighted average house price is now recorded at N$1 044 956.

According to the report, only the Northern region saw positive volume index growth – recorded at 16.5% y/y while the overall pace of land delivery improved by 23.1% y/y from -22.0% y/y recorded a year ago.

According to FNB Market Research Manager Frans Uusiku, house price gains were notable in the Coastal and Northern regions, registering growth of 8.0% and 6.0% y/y respectively.

However, “Double digit contractions in house prices of 10.8% and 13.8% y/y were recorded in the central and southern regions due to affordability issues. As a result, the elevated demand for land in the central region led to a 12-month average price growth of 14.2% per square metre at the end of June 2020, compared to a contraction of 13.0% y/y recorded over the same period of 2019. This can be ascribed to high bid prices offered for the purchase of land mainly by private developers.”

Pinnacle reached

The report further states that although market sentiments may appear to point to further declines in house prices due to expected distressed sales, FNB nonetheless believed that the downward trend has seemingly reached its pinnacle for two reasons.

“First, house prices have only registered an annual compounded growth of 6% since 2009, which is lower than the 9% growth observed in mortgages over the same period. Second, there is a 91% positive correlation between house prices and mortgages since 2009.”
This could imply that house price appreciation realised since the 2008/9 global financial crisis was associated with a corresponding growth in mortgages.
Therefore, from a seller’s perspective, trading activity below the prevailing average price levels may prove difficult due to high level of indebtedness.

With regard to the various regions Uusiku advised that central residential property prices contracted by 10.8% y/y at the end of June 2020 compared to a contraction of 6.1% y/y recorded over the same period of 2019, while house prices in the coastal region have remained buoyant, recording price growth of 8.0% y/y at the end of June 2020 compared to a contraction of 11.7% y/y recorded a year ago.

Uusiku added that it was encouraging to see that overall land delivery grew by 23.1% y/y over the second quarter of 2020 compared to a contraction of 22.0% y/y recorded over the same period of 2019.

“We believe that attractiveness of the residential property market as an asset class will be dependent on the extent of economic recovery and subsequent revival of the rental market. In the meantime, we see accessibility and affordability of housing to be highly concentrated within the small housing segment particularly in the northern and southern regions,” he said.
According to Uusiku looking ahead, immediate pockets of growth are likely to be realized through addition of new developments that respond to evolving levels of household incomes along with fact-tracking the pace of affordable land delivery.

Similar News


Eighty three Covid positive cases reported

2 days ago - 26 September 2020 | Infrastructure

The minister of health and social services Kalumbi Shangula announced that a total number of 1 075 results were received from the laboratories. Shangula said...

Toekenningsproses van huise bevraagteken

6 days ago - 22 September 2020 | Infrastructure

Omaruru Lede van ’n groep inwoners van die enkelkwartiere op Omaruru, het die kantoor van die goewerneur genader om verskeie klagte onder...

Louw ­re-elected as CLOF chairman

6 days ago - 22 September 2020 | Infrastructure

Martin Louw (Macs) was re-elected as the chairperson of the Container Liners Operators Forum (CLOF). Armando Legner (CMA-CGM) was elected as vice-chairperson and Waldi...

Namport updates Covid-19 procedures

6 days ago - 22 September 2020 | Infrastructure

Walvis Bay port captain Lukas Kufuna announced some changes to the Covid-19 induced rules pertaining to foreign seamen on Friday. Kufuna said since the State...

New container terminal goes live

6 days ago - 22 September 2020 | Infrastructure

Walvis Bay's new container terminal went online on 24 August, with RDO Favour being the first container vessel to dock at berth 11. The...

Sustained price increases for homes in Erongo

2 weeks ago - 12 September 2020 | Infrastructure

The FNB House Price Index posted a contraction of 2.7% y/y at the end of June 2020, compared to contractions of 5.6% and 3.7% y/y...

Namport’s new container terminal going strong

2 weeks ago - 08 September 2020 | Infrastructure

Walvis Bay Namibia witnessed the inauguration of Namport’s new container terminal (NCT) constructed on 40 hectares of reclaimed land at a cost of...

Millions unaccounted from MULSP

3 weeks ago - 06 September 2020 | Infrastructure

Walvis Bay • [email protected] The councillor for Walvis Bay urban constituency Knowledge Ipinge says he will institute legal action against the municipality of...

Mines contribute towards safer roads

3 weeks ago - 02 September 2020 | Infrastructure

In an effort to aid road safety, CNNC Rössing Uranium and Swakop Uranium have spent N$200 000 on the installation of Stimsonite road studs over...

Shack Dwellers finally reap fruits of their labour

1 month - 09 August 2020 | Infrastructure

Walvis Bay •[email protected] Members of the Shack Dwellers Federation of Namibia (SDFN) were in high spirits on Saturday.The ground-breaking ceremony for the construction of houses...

Latest News

Covid-19 kills Hats & Roses

9 hours ago | Events

The annual Cancer Association of Namibia Hats & Roses ladies event scheduled for the first Saturday of October in Windhoek, followed by a second event...

Bernard Esau Street should go

10 hours ago | Local News

Swakopmund • [email protected] The Affirmative Repositioning (AR) group that recently registered as a political party, is calling for the renaming of Bernard Esau Street in...

Fire claims life

1 day - 27 September 2020 | Crime

Basilius Mbambo (34) lost his life in a shack fire in the DRC settlement in Swakopmund early on Sunday morning. The deceased and another man...

115 New Covid-19 cases reported...

1 day - 27 September 2020 | Health

The minister of health and social services Dr. Kalumbi Shangula announced 920 Covid test results were received from the laboratories. Shangula said that of these...

Kambueshe not in the running

1 day - 27 September 2020 | Local News

Swakopmund • [email protected] The chairman of the Erongo regional council and the regional council member of the Swakopmund constituency, Juuso Kambueshe (SWAPO), will not...

Walvis Bay represented at Miss...

1 day - 27 September 2020 | Events

Walvis Bay •[email protected] Former Miss Walvis Bay Monique Smith is a semi-finalist in the prestigious Miss Supranational Namibia beauty pageant slated to take place on...

Laptop thieves on the prowl

1 day - 27 September 2020 | Crime

Swakopmund • [email protected] Police in the Erongo region have called on the public, especially shop owners, to be on their guard against a new...

Hotto switch to Pirates

1 day - 27 September 2020 | Sports

Swakopmund • [email protected] Deon Hotto was recently unveiled as signing for South African soccer giants Orlando Pirates.Gerald Güther, who formerly coached Hotto at Swakopmund...

Celebrating black women

1 day - 27 September 2020 | Art and Entertainment

Swakopmund • [email protected] Swakopmund-raised poet Frieda Mukufa (26) who goes by the stage name Damn_Etu, has embarked on a journey to have her poetic...

Load More