Increasing home prices indicate a booming market
After declining by 1.0% y/y compared to the same time in 2020, the FNB Index of House Prices increased by 9.6% y/y in June 2021. As a result, the nationwide adjusted house price average increased significantly from the previous year to N$1 042 852 to N$1 286 908 today. According to Frans Uusiku, FNB Market Analysis Manager, “career high housing prices and a lack of supply are maintaining the Namibian real estate market robust, with pent-up desire piling up in nearly every part of the nation.”
“These patterns reflect the significant uptick in mortgage sales overall, with the large and medium-sized housing sectors having a fairly strong growth impact. This only supports the notion that Namibia is now experiencing a purchasers’ economy, making now an excellent time to purchase real estate or a beautiful house, continued Uusiku.
The large and medium-sized housing categories experienced quarterly declines of 0.7% and 4.1% y/y, correspondingly, to N$2 146 000 and N$4 045 000 in June 2021. These patterns reflect the rise of periodic forces like troubled real estate transactions brought on by depressed economic circumstances and issues with pricing. Relative to reductions of 20.5% and 1.7% observed the year before, sales of properties within the large and medium-sized housing segments skyrocketed by 34.9% and 53.4 y/y throughout the review period. On an even more encouraging note, the modest and luxury sectors of the housing market saw increases in house prices of 7.1percentage points and 95.3percent y/y, correspondingly.
This demonstrates the need and affordability resiliency of these categories. Let’s just say that, if priced fairly, a property in the tiny segment tends to sell quickly, spending an average of 1-4 months on the market. A rise in the marketplace for affordable homes may also be seen in the analysis of trading volumes in the second half. Although this market has been dormant lately, the harsh reality is that it still offers a beacon of hope for Namibia’s general populace regarding accessible housing.
Most of the deals closed in this area, representing for 38 percentage points, and 37%, correspondingly, were in the central and northern regions. “The real estate market is exhibiting some symptoms of a normalization process, although the economy is still in a precarious position. The real estate buying environment has changed and is closer to where it was two years ago. However, given that the Covid-19 pandemic’s effects on the labor market are still being seen, the cost is anticipated to be a problem. We anticipate pricing pressure to decrease in the future as newly constructed homes assist raise supplies from their present low levels and as government movement on cheap homes maintains its steam, said Uusiku.
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