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Property prices remain subdued

Property prices continued to contract in the first quarter of 2019 like they have done since 2018. The FNB House Price Index recorded a contraction of 1.0% at the end of March 2019.

Overall, the property market remains lackluster, as the price index continues to hover in a negative territory. The Coastal region is the only region in which prices increased, having expanded by 8.9% y/y at the end of March 2019, a significant rebound from a severe contraction of 38.0% y/y in March 2018. Prices in the Central, contracted by 8.2% y/y while prices in the North grew at a slower rate of 0.3% y/y compared to 12.3% y/y in March 2018. Similarly, Southern property prices grew at a slower rate of 9.9% y/y after posting growth of 33.8% y/y at the end of March 2018.

According to Ruusa Nandago, Market Research Manager, the lower prices are systemic of the current recessionary environment, which has kept demand muted subsequently lowering prices.
Meanwhile, the volume index has improved significantly to 31.6% y/y compared to 11.7% y/y over the same period last year. This was driven by an acceleration in transaction volumes in the Central and Northern regions from 2.2% y/y and 6.2% in March 2018 to 38.7% y/y and 43.4% y/y in March 2019 respectively.

Coastal volumes, on the other hand, have reached a new low of 22.7% y/y at the end of March 2019. In the same period last year, the Coastal volume index stood at 44.2% y/y. The South is the only region in which the volume index was negative at the end of March 2019, recorded at -4.5% y/y. Transactions remain concentra-ted in the small housing segment where transaction volumes have picked up by 43% y/y. This is to be expected given construction under mass housing was concentrated in this segment.

Nandago advised that FNB expected most activity to be concentrated in the small segment as bank financing becomes readily available to low and medium-income earners for the construction and purchase of PolyCare houses which can be constructed at much lower prices. The National Housing Enterprise (NHE) has earmarked funds for the construction and upgrading of houses in informal settlements around the country. In addition, the Oshakati Town Council intends to significantly reduce the number of informal settlements in that area with funds allocated to the servicing of land. Thus, prices in this segment are expected to taper as more low-cost urban housing become readily available.



Ruusa Nandago
Marketing Research Manager


For more information, please call: 061 – 299 2222 or visit www.fnbnambia.com.na