WINDHOEK – FNB Namibia’s latest House Price Index says with more serviced land becoming available across the country there should be a continuation of moderate house prices that could see single digit growth, particularly within the middle price segment.
“We expect housing delivery to shift towards the middle price segment and thus moderating house prices even further over the remainder of the year to single digit growth. This view is based on sustained volume growth, as more serviced land comes onto the market and private developments increase. But it is doubtful that the volumes will be sufficient to meet market demand and therefore house prices though moderating, will remain elevated,” remarked Namene Kalili, FNB Namibia’s manager: research and competitor intelligence.
Namibia’s housing market experienced a fair amount of downward price pressure in the lower price segments across the whole country. Meanwhile, house prices in the upper price segment were seen accelerating at a much slower pace than they did in 2012 and therefore the general trend shows that house prices continue to moderate.
Kalili advised that the FNB House Price Index regained some lost ground as the index increased by 3.5 percent through April.
He added, however, that the price index remains at 8 percent lower than its September 2012 peak, and this has decelerated the annualised house price movement to 8.2 percent year-on-year growth from last year December’s 25 percent increase.
“This was coupled with an overall increase in housing volumes, where house volumes grew by 11.2 percent month-on-month and 16 percent year-on-year. Land delivery remained weak and thus did not contribute much to the rising housing supply volume. However, developer activity accelerated to 2.3 million square meters of land with a maximum yield potential for 5 400 free standing homes.
“This would bring the cumulative yield potential to 6 740 free standing homes for the first four months of 2013 and should sustain volume growth over the next year or two,” explained Kalili.
When looking at central property prices Kalili mentioned that these had increased by 1.8 percent month-on-month and thus decelerated the annualised growth rate from 25 percent in March to 13 percent in April.
He added: “It is worthwhile to note that volumes have increased by 6 percent month-on-month and were up by 1 percent from the same period last year, particularly in the lower and upper price segments. Land delivery remains of concern in the central market and for the month of April, individuals nor developers mortgaged no vacant land.
“Therefore the cumulative developer activity for the central market remained at 306 280 square meters of land with a maximum yields potential of 720 free standing houses. This is an improvement from previous year’s activity.”
Coastal property prices were back on the front foot, increasing by 12.3 percent month-on-month to bring the annualised growth in coastal property prices to 3.9 percent. House price growth stemmed from properties in the upper price segment that grew by 5.4 percent over the past year, while property prices in the lower price segments contracted by 11.4 percent year-on-year.
Year to date data shows that Henties Bay property prices have fallen by 4 percent, Walvis Bay property prices have fallen by 3 percent, while Swakopmund property prices have increased by 9 percent and were thus largely responsible for the rising house prices at the coast.
Although northern property prices are down 14 percent from the December peak, the overall price trend remains positive, with house prices increasing by 2.9 percent in the month. Southern property prices remained volatile due to very thin volumes as house prices fell by 5.5 percent month-on-month to bring the year-on-year price growth to minus 18.8 percent.
Kalili said that volumes improved further during April although they remained a long way from the pre-financial crisis levels. Developer activity has picked up and thus future housing supply prospects look favourable.
By Edgar Brandt