16 August 2012

Namibia: Buoyant Trading for Northern Property Market

Windhoek — Strong trading activities in the northern property market continue to drive the annualised property market growth in the country, with the FNB House Price Index up 7.7 percent.

Generally many of the properties have been selling at below the asking price, as the owners had overpriced them, especially for properties in the upper price segment, said Namene Kalili, the manager for research and competitor intelligence at FNB Namibia who compiles the index, while property prices in central and coastal area have moderated.

The latest monthly housing index is for April 2012 and covers developments in the national housing market based on bonds registered for natural persons at the Deeds Office.

"The current market activity has a pedestrian pace with almost three quarters of the properties spending more than three months on the market. Although overall volumes improved by 30 percent month on month, they still remain 13 percent lower year on year. This is largely due to supply and demand weakness in the coastal and northern markets," said Kalili.

Volumes in the central market moved sidewise, although 60 possible Elisenheim bonds were not finalised by month end and should carry over to May. Land delivery fell to a new low with a mere 29 stands bonded through April. In the central area the property prices moved sideways from the previous month, but are down 2 percent on an annualised basis.

They have remained relatively stable over the past 12 months after a dramatic increase in late 2011. The year to date data shows that property prices in Gobabis and Okahandja continue to grow by 18 percent and 31 percent respectively. Windhoek being the largest market by far, its slightly negative growth trend is flattening overall prices in the central market for now. Coastal property prices fell 3.7 percent month on month.

The downward price pressure came from the lower to middle price segments, where prices fell 1 percent and 2 percent respectively. On an annualised basis, coastal house prices rose 3.4 percent. As the market moves towards its peak selling season, year to date data show that Henties Bay prices are up 20 percent from last year's average, while Swakopmund property prices rose 9 percent. Property prices in Walvis Bay remained in the red, falling 5 percent from the 2011 average.

Northern property prices continued on an upward trajectory, climbing a further 10 percent in March and raising the year on year growth figure up to 33 percent. House prices in Omaruru and Grootfontein have risen 263 percent and 76 percent respectively, while Otjiwarongo, Okahao, Oshikango, Oshikuku and Ondangwa posted strong double-digit growth figures.

House prices in the southern property market moved sideways after dramatic increases over the past 12 months.  Lüderitz was the only town where property prices increased 104 percent year to date. Land delivery continued to deteriorate across the country to its lowest levels since the beginning of the index in January 2007.

"A total of 29 stands were mortgaged through the month. Half of these stands were from the coastal market. Land delivery at the coast appears to have bottomed-out, with signs of increased land delivery beginning to emerge. Here, 16 stands were mortgaged at an average price of N$74 per square metre. Central land delivery remained weak with four stands mortgaged at N$196 per square metre and falls way short of demand," said Kalili.

Mortgage advance growth remained at 11 percent year on year, which amounts to N$254 million net growth in mortgages. FNB Namibia unpacked the mortgage advance numbers and this shows that the mortgage advances are only growing in the middle price segment and by 36 percent for April, while the lower and middle price segments contracted by 27 and 21 percent respectively. Both these segments did have very weak volume growth.

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