The latest FNB Namibia Housing Index, released yesterday, shows that growth in domestic house prices has slowed to about 11 percent over the last 12 months, compared to 16 percent during the previous 12 months.
“It is definitely turning into a buyers’ market,” said FNB’s market research manager, Daniel Kavishe.
The growth figure is well below the 25 percent growth experienced in 2013/14, which placed Namibia first in the world in terms of the rate of house price increases.
In addition, with new legislation making it compulsory for second-time homebuyers to put down a deposit, this segment of the market has seen a decrease, thus making more homes available for first-time homebuyers.
The effect is that there are many properties now selling below valuation, with many homes going for as much as six percent below market valuation.
During a brief presentation on the local housing market, FNB’s newly appointed research analyst, Josephat Nambashu, confirmed that the market is becoming “tighter”, but noted that Swakopmund and Walvis Bay experienced 28 percent and 23 percent growth in house prices, respectively, over the last 12 months.
Meanwhile, in Windhoek the highest growth in house prices was experienced in Olympia and Otjimuise. The latest FNB Housing Index also showed that currently the most expensive towns in the country in terms of housing are Windhoek, Swakopmund, Tsumeb, Mariental and Okahandja.
On the opposite side of the spectrum the least expensive towns in terms of housing costs are Lüderitz, Usakos, Katima Mulilo, Keetmanshoop and Otavi.
Kavishe said the country had experienced a tremendous amount of centralised growth in recent years, but pointed out that the market is slowly beginning to align itself to inflationary increases.
“There are signs that the market is self-correcting and for the near future we are looking at growth tapering down to five or six percent,” said Kavishe while responding to a question by New Era on the possibility of the housing bubble bursting in the near future.
“What we have also seen is a sharp decline in the upper segment of the market” he confirmed.
He added that property can still be seen as a good investment, but cautioned that it should be seen as a long-term investment of between 10 and 20 years and not as the get-rich-quick scheme that it has been in recent years when investors recouped their investment within two to three years.