The appetite for acquiring houses and land by people living in Northern and Southern has reached low levels last seen in 2014, statistics from the FNB Q1 Housing Index report for the 2022 show.
The report attributed the contraction to downward sales as well as concentration of small housing, including buyer’s profiles characterised by joint-bonds.
“The northern house price index posted a 12-month average contraction of 5.7% at the end of March 2021. This is the deepest contraction recorded since April 2014 and points to the dominance of the small housing segment and a downward moderation in sales activity. The volume index is nonetheless starting to show firm signs of recovery from a negative growth territory seen in the last quarter, marking a 12-month average growth of 0.0% at the end of March 2022,” FNB Market Research Manager Frans Uusiku said.
Average house prices in the northern regions were recorded at N$823 000, and 10.9% year on year contraction.
Uusiku noted that the southern house price index performed poorly compared to the rest of the regions, posting a 12-month average contraction of 7.4% at the end of March 2022.
“The same trend was also observed in respect of the volume index, which recorded a contraction of 9.2% – the deepest contraction since May 2020. During the period under review, a sizable share of sales activity was mainly observed in Keetmashoop and Mariental,” said Uusiku adding in the South, the buyers’ profile is mainly characterized by joint bonds and to a certain extent by female individuals.
“This implies that the market is perceived to be attractive to those that regard it as a primary place of residence and not necessary for investment such as the ‘buy-to-let’ market. Furthermore, the average age for this market was calculated at around 41years old, further supporting the later narrative,” he said.
“Looking ahead, we expect demand to moderate as interest rates increase, but we don’t expect these dynamics to materially impact price developments in the region.”
In terms of land, sales of residential plots contracted by an average of 16.9% at the end of March 2022 according to FNB report, reflecting an improvement from a contraction of 48.1% at the end of 2021; but, “still worse than the contraction of 14.4% recorded a year earlier.
In addition, Uusiku said, the contraction in sales of land was more evident in the coastal region (-22.7%), followed by the central region (-15.1%), the northern region (-12.7%) and the southern region (-2.9%).
“We continue to maintain our view that solving for accessible and affordable housing through land delivery would require institutionalization of Public-Private-Partnership mechanism,” he said.
All in all, The FNB residential property price index posted a 12-month average growth of 4.7% at the end of March 2022, down from 7.1% at the end of 2021, but unchanged compared to the same period over 2021.
The 12-month national weighted average house price came in at N$1 205 111 at the end of March 2022, up from N$1 157 689 in the corresponding period of 2021
