House Prices Fall As Volumes Increase

21 April 2011

The FNB Namibia House Price Index fell 12,4 basis points in November, as the distribution of housing sizes returned to normal, with significantly higher volumes in the lower price segments.

“The FNB House Price Index is up 2,3 per cent year on year (y-o-y), while the volume index is up 1,3 per cent,” said Namene Kalili, manager of research and competitor intelligence at the bank.

Kalili said there is evidence of increased new housing delivery, with estimated new houses accounting for 25 per cent of the housing volumes.

He said despite higher volumes, the price index in the lower price segment was up 2,9 per cent month on month (m-o-m) and 11,4 per cent y-o-y, with upward price pressure mounting in the coastal and southern housing markets.

House prices in the lower price segment ranged from N$250 000 to N$269 000. The house price index for the medium price segment fell 1,6 per cent m-o-m and two per cent y-o-y.

“The price index for properties in the upper price segment moved sideways on a monthly basis, but is up 7,9 per cent y-o-y, while prices have stagnated in the central market,” Kalili said.

The FNB Volume Index was back on the upward trajectory in November due to strong volume growth in the small price segment, with a total of 301 properties were registered at the Deeds Office.

On an annualised basis, the volumes were up 22 per cent. In the central regions, volumes were up 28 per cent due to properties in Cimbebasia and Khomasdal.

Kalili added that there was also an increase in new house delivery in Auasblick and Olympia.

“Coastal volumes continue to rise for the fifth consecutive month, with volume growth emanating from Swakopmund’s lower to medium price segments of Mondesa,” he said.

Volumes were up 12 per cent m-o-m in the North due to increased volumes in Ongwediva’s medium price segment, which remains a development hotspot, according to Kalili said.

Mortgage advances to individuals decelerated to 8,3 per cent y-o-y, thus the year to date average remains at 8,1 per cent.

Kalili said monthly data suggests that growth in the primary mortgage bond market has reached its peak for the current growth cycle, with growth figures stagnating around 2,5 per cent m-o-m.

Developer activity fell during November with 216 000 sqm of land acquired by developers. Almost half of this land was at the coastal towns of Swakopmund (72 000 sqm) and Walvis Bay (32 000 sqm).

A total of 74 000 sqm of land was brought in the central areas, with 70 00 sqm in Windhoek and the remainder in Okahandja, while Tsumeb (19 000 sqm) and Ongwediva (14 000 sqm) were the hotspots for developers in the north, Kalili said.

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