Restricted supply continues to push up property prices

Home Business Restricted supply continues to push up property prices


FNB Namibia’s just-released housing index for the second quarter of 2015 states that during this quarter house prices edged higher, as restricted supply continued to contribute to property price growth.

“On a quarterly basis the price index advanced 17 percent, supported mainly by price growth during the month of May and June. The volume index has eased with current quarterly growth of 2 percent, lower than the 8 percent recorded for same period last year. Compared to the first quarter of the year, the index showed that volumes have dwindled by 3 percent, mainly on the back of poor volumes across all regions during May,” said Daniel Kavishe, market research manager at FNB Namibia Holdings.

Kavishe went on to say that central property prices grew substantially, with data from Windhoek indicating a 23 percent growth in median prices while prices in Okahandja grew by 12,6 percent. “When looking at Windhoek, prices in Omeya have doubled, with the average median price in the area valued at N$1.8 million for the quarter, but with median stand size of 1091 square meters.

“Finkenstein came in at N$1 million, similar to prices in Dorado Park and Elisenheim. In the upper segment, prices in areas like Eros have increased by 77 percent. Meanwhile, in areas such as Klein Windhoek and Olympia, growth in prices has declined by 21 percent and 23 percent quarter on quarter. “Across the central area volumes are generally up by 27 percent, a good sign that the property market is still quite active, despite high prices,” said Kavishe.
When looking at the coastal area, the FNB Housing index reveals that coastal towns have shown growth in the median house segment with volumes of transactions increasing by 17.0 percent. Transactions for the top end of the market are down 36.4 percent quarter on quarter, as median prices in that segment grew by 29 percent, thus averaging a median price of N$2.9 million.

The sharp rise in prices in this upper segment is supported mainly by increasing prices in Swakopmund, with median bond sizes valued at N$4.5 million. High value transactions were recorded in extension 18, valued at N$5 million. Walvis Bay recorded the highest quarterly growth volumes at 30 percent, followed by Swakopmund at 16 percent.

Prices of houses in the northern regions recorded an overall growth of 15 percent quarter on quarter, as areas like Ongwediva, Arandis and Tsumeb recorded significant transactions during the quarter. Ongwediva recorded a growth of 56 percent, pushing the median price in the area to N$784 000. Ondangwa recorded 26 transactions at the end of June and a total of 39 transactions for the quarter, making it the fastest growing northern town, followed by Eenhana and Ongwediva.

Median prices in Keetmanshoop and Luderitz edged towards the 700 000 mark at the end of June, but this was a result of a few isolated large transactions. Volumes were however up 11 percent for the quarter, mainly as a result of increased activity in Luderitz. Very few transactions were recorded in Mariental for the quarter, as was the case for Bethanie and Stampriet.

“The growth in house prices will remain a permanent feature of discussion for the next few quarters. With soaring energy prices, coupled with slow processes across the municipalities, delivery of serviceable land could roll out at a slower pace than anticipated,” concluded Kavishe.