Favourable environment to invest in property

PHILLEPUS UUSIKUNamibia 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.RegionsThe 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.

Favourable environment to invest in property

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Namibian Sun 2025-03-10

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Favourable environment to invest in property

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Namibian Sun 2025-03-10

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