WINDHOEK – Oshakati is officially Namibia’s town with the highest house price increases last year – as well as for the last five years. A house that cost N$486 300 in 2009 was priced at N$964 100 in December 2014. A similar house in Windhoek would have cost N$472 000 in 2009 and N$900 000 in December 2014.
Further, the prices of Windhoek houses registered a decrease in 2014 compared to 2013.
In Oshakati the price more than doubled from N$420 000 in 2013 to N$964 100 in 2014.
This is according to the just released FNB Housing Index for 2014, which found that house prices have been increasing significantly in various towns across the country.
Towns that registered house price increases higher than Windhoek include Arandis, Eenhana, Otavi, Ondangwa, and Omaruru.
Expectations are that the anticipated economic growth in the country could further increase housing prices, with stock for new houses remaining limited.
However, the increases in interest rates and rising costs of utilities are expected to provide some sort of “temporary housing price relief to aspiring home owners in 2015”, the FNB report states.
The House Index however notes that the increases over the last five years up to 2014 do not necessarily mean house prices have reached the unaffordable levels across the country, as the prices remain within the “affordable” rates.
The good news is that Namibia no longer tops the list of the countries with the most expensive houses in 2014, having moved to the bottom part of the list compiled by Knight Frank’s Global House Price Index. Ireland now leads the rankings followed by Turkey, Kazakhstan and Hong Kong.
Overall, the house prices have begun slowing down due to weak economic fundamentals and rising interest rates, with prices contracting in the nation’s capital.
And although this brings a welcome relief to aspiring homeowners, supply still remains weak, says Namene Kalili, who compiles the FNB Housing Index.
“With growth in the Namibian economy expected to remain positive, driven mostly by the mining, energy, transport and construction sectors, the limited supply of new housing stock is expected to trend house prices upwards at double digit pace, while the interest rate hiking cycle and rising costs of utilities (should) provide temporary price relief to aspiring home owners in 2015,” said Kalili.
Figures up to December 2014 show that house prices in Namibia increased by seven percent to bring the annual average growth to 19.8 percent growth for 2014.
Land delivery increased by 20 percent from the previous year to 202 vacant stands, while land prices moderated by 14 percent to end the year at an average price of N$386/m².
Kalili however says the 202 vacant stands are hardly enough to meet the growing housing demands. Developers mortgaged a further 34 825m² of land with a maximum yield potential for 81 free standing homes.
Short-term data points towards softer property prices in the latter part of the year, driven mainly by price weakness in the central and southern property markets, coupled with weaker economic data and rising interest rates.
The number of towns where prices have contracted has begun to increase, led by the country’s capital, Windhoek. Over the past five years prices have increased by 84 percent from N$381 000 in 2009 to N$700 000 in 2014.
Northern property prices increased in excess of 27 percent through the year, but still remained the most affordable as monthly prices ranged between N$434 000 and N$560 000.
Price growth was driven by the lower price segment after the supply of entry level homes contracted through the year and hence accelerating house prices in the lower price segment.
Southern property prices remained volatile through the year, with prices up 51 percent after ranging from N$258 000 to N$484 000. Prices were driven by the middle price segment and shifts in the housing mix on the back of thin trading volumes.
Coastal property prices moderated for most parts of the year, with a few surprise peaks in September, October and December, when prices were expected to soften. Falling demand for large coastal homes was responsible for the 29 percent contraction in volumes. Monthly prices ranged between N$664 000 and N$956 000.
• (See additional story in our business section)