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Market Review - April 2020

Housing market still stable


Housing market still stable

The rental market continues to bottom-out although at a moderate pace. The FNB Rental Index as at December 2019 showed a contraction of 0.8%, although this reflected a steep improvement from a contraction of 8.6% recorded over the same period in 2018.

The public’s interest in 2-bedroomed accommodation rose by 6.6% from December 2018 to December 2019, whereas interest in 3-bedroomed homes rose by 16.2% during the same time frame. The 2017-2018 figures had been negative contractions of 10.2 % and 11.7% for 2-bedroomed and 3-bedroomed homes respectively.

The growing participation in the 2 to3-bedroom segments and the resultant price pressures brought the average national rent price to N$6 992 as at December 2019. This translates into an annual growth of 3.6%. On a quarterly basis, Swakopmund recorded the highest rental prices in the fourth quarter of 2019, with the average rent recorded at N$9 274 per month.

“This reflects a significant growth of 26.6% from December 2018 due to high public interest in 3-bedroomed homes, while also pointing to deteriorating affordability of houses in the coastal towns,” said Frans Uusiku, FirstRand Namibia Market Research Manager.

Meanwhile, Windhoek is the second highest with respect to rental prices, with an average rent of N$6 545 per month which is 2.5% less than the same period in 2018. Furthermore, the annual contraction in rental prices in the fourth quarter of 2019 was witnessed across other major populated towns such as Ondangwa (-34.7%), Rundu (-22.4%), Ongwediva (-17.1%) with an exception of Oshakati, which saw growth of 6.7% in comparison to the last quarter of 2018.

“The rebound in rental prices since May 2018 has continued its upward trajectory, although growth remains in negative territory,” commented Uusiku.

The price-to-rent ratio of “13” means that the national average house price is 13 times the national average rent that could be earned per annum on a residential property”. This ratio increased from nearly 11 points in July 2019.

“We expect growth in rental prices in the first quarter of 2020, followed by stabilization,” concluded Uusiku. >


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