The third quarter of 2015 saw favourable volumes of trade seeping into the housing market as new residential properties reached completion.
In the latest FNB housing index Daniel Kavishe, market research manager at FNB Namibia Holdings, stated that central property prices grew substantially, with data from Windhoek indicating a 27 percent growth in median prices, while prices in the Okahandja area rose by 13.8 percent.
In Gobabis, property prices grew by 16.3 percent, while number of transactions tripled in that area.
In Windhoek, prices in Academia increased by 76 percent pushing median prices to N$ million. In Cimbebasia median prices have increased to N$1.6 million, but offer better value for money based on the average stand size of 341 square meters compared to central Windhoek.
Overall volumes in the central region have increased by 15 percent for the quarter with most transactions emanating from Katutura, Otjomuise and Khomasdal. Dorado Park prices and volumes have risen drastically from the first two quarters of 2015.
When looking at the coastal volumes it was noted that these showed substantial increases in the third quarter with a 12 percent increase across the three major towns of Walvis Bay, Swakopmund and Henties Bay.
Median prices have increased, with 11 percent for the quarter recording N$975 000 at the end of September.
“Regarding prices of houses in the northern regions,” said Kavishe, “these recorded an overall growth of 22 percent quarter-on-quarter, as areas like Ongwediva and Tsumeb show significant transactions during the quarter.
Tsumeb recorded 30 percent growth, pushing the median price in the area to N$829 000, while in Ongwediva prices edged up by 18 percent. On the contrary, the southern part of the country remains a region with very low transactions and hardly any movement in property prices.”
The FNB housing index states that median prices in Keetmanshoop and Lüderitz edged towards the N$700 000 mark at the end of the third quarter. Most transactions were recorded in Lüderitz, but with low median prices at N$440 000.
The most expensive property, valued at N$900 000, was in Keetmanshoop.
In conclusion Kavishe said the third quarter received the highest volume in transactions since the third quarter of 2013. This is positive sign for the market, indicating that despite the quick rise in property prices the demand for housing has not eased.
“We, therefore, anticipate that fourth quarter numbers will reveal higher volumes and higher prices than initially estimated. We expect average growth in prices for 2015 to be 17 percent and average volume growth to be 14 percent. In 2016 and beyond, the main concern will be jolting the supply side in order to cater to new entrants in the market (home owners). In terms of market dynamics, there was a 44 percent decline for housing in the medium to upper end in favour of property well under N$1 million over the past year.
“The shift in demand is not only in the pricing but also in location, with a 13 percent increase in property demanded at the coast and in northern towns versus property in Windhoek. The trend is likely to continue into 2016, unless further measures are taken to address the current structural bottlenecks.”
The latest FNB housing market report closes by stating that the gradual rise in interest rates seems to have had a muted impact on the demand for property. Generally, consumers will react by reducing their exposure to other forms of debt e.g. instalment credit and advances before changing their demand for housing.
The quick rise in mortgage debt (16 percent year-on-year) and the absorption of new property that comes into the market suggest a speculative housing market. “We anticipate that more houses will be bought for speculative purposes with the current growth rates experienced in the market,” Kavishe concluded.