House prices increase 7% over 12-months
House prices increased by 7% on average over a 12-month period according to FNB Namibia’s Housing Price Index report for the third quarter of 2024, conversely higher than prior quarters, FNB Namibia said.
“The FNB House Price Index printed a 12-month average growth of 7% in the third quarter of 2024, which was the highest growth recorded since the third quarter of 2021 compared to a growth of 1.7% observed in 2024 and is significantly above the 3.3% growth in the third quarter of 2023,” the report said.
According to the report, the overall national house price now stands at N$1.3 million at the end of the third quarter of 2024 - above the N$1.2 million recorded in 2024 and the N$1.2 million recorded in the second quarter of 2023.
Transaction volume growth was recorded at -8.2% in the third quarter of 2024 on a 12-month moving average basis.
Regionally, the central region moved out of contraction territory and posted growth at 1.1% in the third quarter of 2024. Moreover, the coastal and northern regions also saw lower contractions at -4.7% and -19.0%, respectively, whereas the growth in the southern region remained at -20.0% in the third quarter of 2024 on a 12-month average basis, however volumes remain thin in nominal values.
Despite an easing of the interest rate by 25 basis points to 7% in December 2024 and amended tax regulations of reduced rates and tax refunds had availed additional disposable incomes to consumers, FNB said it did not expect to have a big impact on the housing market.
“The net impact of any favorable economic conditions on the housing market are expected to be minimal. We continue to only expect conditions in the property market to improve in the medium term,” FNB said.
The backlog in serviced land would also continue to affect the property market, FNB said.
“From a supply side perspective, the backlog of serviced land remains a concern and continues to weigh on the residential property market. Therefore, with increased prices expected from higher demand and expectations of increased housing and utilities inflation coupled with the low supply of serviced land, we expect the FNB House price index to continue its upward momentum albeit at a slower pace.”
“The FNB House Price Index printed a 12-month average growth of 7% in the third quarter of 2024, which was the highest growth recorded since the third quarter of 2021 compared to a growth of 1.7% observed in 2024 and is significantly above the 3.3% growth in the third quarter of 2023,” the report said.
According to the report, the overall national house price now stands at N$1.3 million at the end of the third quarter of 2024 - above the N$1.2 million recorded in 2024 and the N$1.2 million recorded in the second quarter of 2023.
Transaction volume growth was recorded at -8.2% in the third quarter of 2024 on a 12-month moving average basis.
Regionally, the central region moved out of contraction territory and posted growth at 1.1% in the third quarter of 2024. Moreover, the coastal and northern regions also saw lower contractions at -4.7% and -19.0%, respectively, whereas the growth in the southern region remained at -20.0% in the third quarter of 2024 on a 12-month average basis, however volumes remain thin in nominal values.
Despite an easing of the interest rate by 25 basis points to 7% in December 2024 and amended tax regulations of reduced rates and tax refunds had availed additional disposable incomes to consumers, FNB said it did not expect to have a big impact on the housing market.
“The net impact of any favorable economic conditions on the housing market are expected to be minimal. We continue to only expect conditions in the property market to improve in the medium term,” FNB said.
The backlog in serviced land would also continue to affect the property market, FNB said.
“From a supply side perspective, the backlog of serviced land remains a concern and continues to weigh on the residential property market. Therefore, with increased prices expected from higher demand and expectations of increased housing and utilities inflation coupled with the low supply of serviced land, we expect the FNB House price index to continue its upward momentum albeit at a slower pace.”
