Since the second quarter of 2020, the FNB House Price Index has delivered steady growth, marking a five-year double-digit growth record of 10.9% year-on-year in September 2021, up from 2.0% y/y in the same period of 2020. As a result, the national weighted average house price came in at N$1 224 083, compared to N$1 204 691 seen a year earlier. “The performance of the housing market continues to be underpinned by supply-side factors such as a shortage of affordable properties, coupled with fierce competition amongst banks in keeping mortgage rates as low as possible. Young professionals continue to play an important role in driving sales activity in the lower end of the market – especially in the central region, while the large to higher end of the market is innately dominated by the buy-to-let investors,” said Frans Usiku, FNB market research manager. “From a segment perspective, the large housing segment recorded the highest quarterly growth of 8.3% y/y in prices, compared to a contraction of 9.2% y/y recorded this time last year. On a quarterly basis, an average house in the large segment is now estimated to be selling at N$4 392 000, based on incoming sales data. As the case has been elsewhere, the added boost in sales activity in this segment may appear to suggest increased competition for high-valued properties by those with adequate access to funding,” he added.
“On the other hand, the small housing segment landed the second-highest position in terms of quarterly house price growth of 5.3% y/y. In contrast, the luxury segment recorded a contraction in quarterly house prices of 3.2% y/y, which could be attributed to inherent affordability issues. The Namibian housing market appears to be at an inflection point, where pent-up demand and low interest rates are expected to keep sales activity at elevated levels as the economy continues to recover. On the downside, however, economic confidence may also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage.”