WINDHOEK - House prices appreciated in the towns of Katima Mulilo, Grootfontein, Otjiwarongo, Oshikango, and Oshikuku, while Windhoek property market weakened by 2 percent, according to the latest FNB House Price Index for March 2012.
The index accelerated by 8 percent month on month to 150 basis points, although year-on-year it grew 0.6 percent, effectively going back to where it was a year ago.
“Overall volumes remained very weak through March and were down 4 percent month on month and down 14 percent year on year. Numerous properties in the upper price segment were withdrawn from the market after spending several months on the market without a sale, which implies that demand is weakening in the upper price segment at the current market price.
“Bond registrations for Elisenheim and Omeya are in full swing and these are expected to support volumes for the remainder of the year. Land delivery fell to a new low with a mere 21 stands bonded through March,” said Namene Kalili, manager for research and competitor intelligence at FNB Namibia.
In the central area property prices rose 7 percent month on month, but are down 7 percent on an annualised basis. Over the past year, house prices have remained relatively flat in the central region.
Despite increased supply in Okahandja, property prices have soared 41 percent over the first three months of 2012 as rising demand pushed up house prices in Okahandja. Gobabis was not too far behind and house prices have already risen by 25 percent in 2012.
At the coast property prices continued to improve from their December low, with a further 9 percent month on month increase, but down 4 percent year on year. In December coastal prices were down by as much as 24 percent year on year. Coastal house prices generally increase during the second quarter and peak in July, but this year the price increases have started a month earlier than expected.
“This is due to price increases in Henties Bay, where property prices rose 18 percent during the year. Both Swakopmund and Walvis Bay experienced negative price growth, with house prices down 3 and 4 percent respectively,” said Kalili.
Property prices in northern parts of the country continued with their upward trajectory, climbing a further 10 percent in March and raising the year on year growth figure up to 18 percent.
House prices in Omaruru and Grootfontein have risen 102 and 76 percent respectively, while Otjiwarongo, Okahao, Oshikango and Oshikuku have all posted double digit growth figures.
“House prices in the southern property market continued to increase dramatically. House prices in Luderitz and Mariental rose 108 and 61 percent respectively, while those in Keetmanshoop were flat. But once again we must warn that this is on the back of very low volumes,” Kalili said.
On a monthly basis, house prices have started increasing once again, with strong price increases in many of the northern towns. Windhoek house prices have weakened over the past five years and so far, property prices are down 2 percent.
According to Kalili the thin volumes suggest that demand is low at the current market prices and consequently properties are spending a lot more time on the market than before.
Volumes are however expected to increase over the coming months and yield higher volumes than 2011. Land delivery is expected to remain a challenge and therefore a surge in upgrades and extensions to existing properties is expected for the remainder of 2012.