Windhoek — The latest FNB Housing Index shows that median house prices fell from N$350 000 to N$290 000.

The data covers the whole country for March including all the home loans approved by the four commercial banks, government, the National Housing Enterprise (NHE), local authorities and private individuals and companies.

Namene Kalili, FNB's manager markets research and competitor analysis, said the methodology excluded transactions below N$100 000 and further mortgage bonds.

"The reason is simply because these transactions do not reflect the true cost of housing in Namibia and as such it may distort the FNB Namibia Housing Index."

He said that the house price index for the central part covering Windhoek and Okahandja fell by 6.7 basis points as a result of small and large houses.

"The house price index for the coast fell by 4.6 basis points, because of large coastal homes," he said.

Kalili added that the house price index for the north fell by 7.5 basis points as small and medium houses lost value. The house price index, he said, for the south shed 8 basis points due to small and medium houses.

"On a more positive note', he said, "the lower median house price has lifted demand by 1.2% on an annualised basis in all areas except for the coast."

The house volume index in the central parts surged 26.2 basis points due to increased demand for all size properties. The housing index at the coast fell by 165 basis points primarily due to small and medium size houses, while the housing volume index in the north surged 88.5 basis points as the number of small and medium houses increased by 129% due to the introduction of brand new affordable housing stock.

Kalili said market mortgage advances growth appears to be recovering from its 2008 slump, growing by 10.3% to N$14.6 billion in March.

"We expect the FNB house price index to stabilise at levels that are conducive for good volume growth. The introduction of brand new low cost housing will provide welcome relief to first time home owners in the small house segment and with more houses due for delivery we expect median house prices in the segment to come down to N$195 000 as the supply mix shift towards the affordable end of the housing market," he said.

He said this trend might put downward pressure on medium houses.

"Stabilizing house prices along with the lower interest rates are exciting buyers and increasing demand and with an estimated 1 500 properties on the market we expect this buyers market to prevail for three to four months," Kalili said.