HOUSE prices in Namibia continued their upward trajectory in October, showing an increase of 23 per cent compared to October last year, FNB Namibia's latest Housing Index states.

The index, which was released yesterday, also shows that median prices climbed by 1,6 per cent month on month in September, and further 4,5 per cent the next month.

The value index stands at 121,9 basis points.

"Although it is above our year-end prediction, it is expected to come under some pressure in December due to National Housing Enterprise's Otjomuise development," FNB Market Research and Competitor Analysis Manager Namene Kalili said. NHE is building 100 houses for the low-income segment due for occupation by year-end.

Volume-wise, the index performed less impressively.

Month-on-month (m-o-m) volumes were down 3,1 per cent in September and 3,3 per cent in October. On an annual basis volumes are down 19 per cent.

Therefore the growth in the volume index moderated ending at 130 basis points in October.

"Going forward, we expect the volume index to enjoy support from the NHE's Otjomuise development," Kalili said.

Small house prices came under pressure in September and October due to accelerated low-cost housing delivery, effectively diluting median house prices in the segment, he said.

The index currently stands at 89,7 basis points, meaning it has fallen by six basis points since August. Large house prices faired a bit better.

Volumes disappointed in September and October, with 289 and 279 respectively, Kalili said. M-o-m volumes were down 3,1 per cent and 3,3 per cent respectively.

Volumes were down 4,3 per cent in the central region due to weaker uptake in the small-house segment in both Windhoek and Okahandja.

The decline in small and large houses traded at the coast drove volumes down at the coast by four per cent month on month. Furthermore, the trade in large coastal homes was down nine per cent month on month, but volumes are 48 per cent up on an annualised basis.

"It is noteworthy that 70 per cent of the trading activity for this period was at Walvis Bay," Kalili said.

Volumes continued to grow in the northern parts of the country, this time by 3,4 per cent m-o-m.

Activity in the small house segment was flat, while volumes grew nine per cent and 19 per cent in the medium and large house segment respectively. Ongwediva was particularly busy, followed by Outapi and Otjiwarongo, Kalili said.

"As for the South, very little can be said about the seven houses traded in September or the eight houses traded in October," he said.

Kalili said medium-sized house prices moved sideways in September and October and more or less stabilised after growth in the first and second quarters.

"Overall the gains in the value index are currently driven by a shift in the housing mix, where the share of the small house segment has fallen from 65 per cent in March to 49 per cent in October, due to acceleration in the low cost housing delivery."

Namibian mortgage advance decelerated to 7,7 per cent year-on-year during October, off last year's base, Kalili said.

According to the deeds data, the secondary mortgage advances market slowed down to 23 per cent year on year. Average secondary mortgage bond currently stands at N$230 000 and as such accounts for one third of total mortgage advance growth, he said.

Kalili said in real terms, Namibians went through negative mortgage advances from May 2008 until June this year, partly due to high inflation rate. Since inflation moderated in the second quarter, the local numbers have been slightly positive, but remain weak.

"Thus the de-leveraging process has not taken hold in Namibia as yet in the housing space," he said.

Kalili said recessionary and inflationary pressures continue to dissipate, interest rate outlook remains favourable, while consumer confidence moved sideways.

"Thus we are still on course to close the year off at 150 basis points on the volume index, and 120 basis points on the price index," he said.