WINDHOEK
Affordability of houses will fall further as consumers are already financially stretched, according to First National Bank of Namibia.
In its latest Housing Index, the FNB says the expected increase in core interest rates this month does not auger well for the housing market.
The index highlighted a marked slowdown in the number of completed building plans with only 137 plans completed in September compared to 318 in July this year.
By the end of March this year, 236 plans were approved at a value of N$80.3 million, while in September, the number fell to 224, although the value was much higher at N$94 million.
Additions and alterations to existing structures account for over 90 percent of building plans approved by the City of Windhoek.
During this year’s third quarter, the weighted average valuation price for houses in Windhoek grew by 2.12 percent after stalling in the previous quarter.
“It is clear that the housing market is in a declining phase as shown by the decline in the price mix of residential property that was evaluated, as well as by the marked deceleration in residential mortgage advances. This process seems to be driven by the high interest rate environment,” FNB’s Manager for Market Intelligence and Research, Daniel Motinga, said.
Mortgage advances are expected to decline further as interest rate hikes take effect.
Overall, it seems most of the movement in the housing market takes place below the N$500ǟ