Sustained price increases for homes in Erongo
12 September 2020 | Infrastructure
This brings the national weighted average house price to N$1 044 956 as at June 2020. House price gains were notable in the Coastal and Northern regions, registering growth of 8.0% and 6.0% y/y respectively.
House prices in the coastal region have remained buoyant, recording growth of 8.0% y/y at the end of June 2020 compared to a contraction of 11.7% y/y a year ago according to information contained in the FNB House Price Index.
Average house prices
The index states that the average house price in the coastal region is now N$1 107 000.
Walvis Bay and Henties Bay have consistently sustained price growth: House prices in Walvis Bay and Henties grew by 6.5% and 6.0% y/y to N$742 000 and N$776 000 as at June 2020, respectively.
Information compiled also shows that selling a house in Swakopmund has proven difficult in recent times due to economic hardships.
“This is particularly true for the mining and construction sectors, which have traditionally been the key engine of the housing market in this region. Consequently, about 90% of houses sold over the last 12 months have been concentrated in the small housing segment – resulting in house price contraction of 10.4% y/y to N$720 000 as at June 2020,” said FNB market research manager Frans Uusiku.
According to Uusiku, accessibility and affordability of residential land remains a recurrent issue and an important policy imperative of the Namibian government.
“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. Effectively, the northern and coastal regions accounted for an equal share (35%) of total land delivered over the reviewed period, followed by the southern region (19%) and the central region (11%),” he explained.
The NSA Building Plans Completed Index for June 2020 which tracks changes in the nominal value of building plans completed, reported that Swakopmund and Walvis Bay recorded contractions of 36% and 26% y/y at the end of June 2020 respectively.
Whilst the report only covers four jurisdictions, it is believed that it serves as an important indicator for the outlook of the property market and construction sector at large in the respective areas.
“The 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. Looking ahead, immediate pockets of growth are likely to be realised through addition of new developments that respond to evolving levels of household incomes along with fast-tracking the pace of affordable land delivery,” concluded Uusiku.