Namibia’s rental markets demand fundamentals remain relatively weak despite most advanced economies being on a path of recovery due to the resumption of “normal life”, improved pace of COVID-19 vaccination and job growth, FNB Namibia has said.
“This is evident in the FNB Residential Rental Index which has retained an annual contraction of 2.3% at the end of September 2021 from the preceding quarter, which is still worse than the -1.3% seen in September of last year,” said Frans Uusiku, FNB Market Research Manager.
The national weighted average rent came in at N$6,790 at the end of September 2021 from N$7,061 a year ago, according to the Bank’s Residential Rental Index.
“The continued deterioration of the residential rental market also appears to highlight easing competition pressure within the single-family market due to limited inventory of affordable housing. This is particularly true for the central region. Most notably, the 2-bedroom and 1-bedroom segments recorded the largest rental contraction of 1.5% and 1.1% year-on- year (y/y), to N$6,512 and N$3,583, respectively,” Uusiku said.
A closer look at the central region shows that Windhoek is the biggest residential rental market, accounting for 92.0% of rental listings year-to-date, a marginal decrease from 92.4% and 95.0% in 2020 and 2019.
“Even so, this remains the smallest contraction observed in rents across the towns under review. However, some suburbs in Windhoek have seen real pressure on the supply of rental properties, especially during the pandemic. This could be due to the emergence of semigration or some households opting to work from other towns as organisations adopt flexible working arrangements,” said the FNB Namibia Research Manager.
“The recovery of the residential rental market appears to have flatlined, with the sector now characterised by weak demand, increased vacancies and negative rental growth across the board. Cyclical forces such as weak demand fundamentals are believed to be at the center of these dynamics. According to the second quarterly report by the Ministry of Labour , Industrial Relations and Employment Creation for 2021, the industry is still seized with the unpleasant number of retrenchment. During the said Quarter, the Ministry received notices of intent to dismiss a total of 881 employees by 117 employers. This reflects an increase of 58% and 55% q/q in respect of employees and employers, respectively.”
