The FNB Namibia Housing Price Index reports that the national average house price stood at N$1,263,673 at the end of the second quarter of 2024, reflecting a N$30,000 increase from the prior quarter.
The increase is from the N$1,229,776 recorded in the first quarter of 2024 and surpasses the N$1,242,713 reported in the second quarter of 2023.
FNB Namibia Market Research Manager, Mandisa Van Wyk, says the 12-month moving average prices for the central, coastal, northern and southern regions stand at N$1,625,000, N$1,412,000, N$855,000, and N$833,000, respectively.
The FNB House Price Index highlighted a 12-month average growth of 1.7% in Q2-2024 compared to the growth of 0.3% observed in Q1-2024 and was lower than the 6.2% growth recorded in Q2-2023.
The growth rates for the small, medium, large and luxury segments stood at -0.8%, -1.4%, 3.2% and -4.6% respectively.
“From a regional perspective, the central region growth rate improved to 2.9% whilst the coastal, northern and southern regions contracted at 3.7%, 3.3% and 1.2% respectively from the first quarter of 2024,” said Van Wyk.
Transaction volume growth was recorded at -17.7 % on a 12-month average in Q2-2024 and has remained in contraction since Q4-2021. Similarly, revised volumes for Q1-2024 and Q2-2023 stood at -26.0% and -23.3% respectively.
Van Wyk noted that there was an uptick in volumes in the southern region at 20.0% in Q2-2024 however volumes remain thin.
“The rest of the regions namely the central, coastal, and northern remain in negative territory at -12.9%, -7.0% and -25.9% respectively on a 12-month average basis,” she said.
From a segment perspective, the contraction in growth continued to be observed in almost all categories at -20.5%, -7.4% and -28.6% for the small, medium, and large segments respectively for Q2-2024.
“The large segment fell deeper into contraction from -16.7% in Q1-2024 whilst the small and medium improved from -26.1% and -26.2% respectively. The luxury segment continued to record muted growth at 0.0%,” she said.
Although volume growth is showing improvement it remains in negative territory, she highlighted that growth in buying activity continues to be hampered by monetary pressures amid the elevated interest rate environment which has kept consumer spending subdued.
“The weak activity is further underscored by the growth in mortgage credit extended to households which remains weak at 1.9% y/y at the end of July 2024,” she said.
The report noted that the Bank of Namibia commenced with the cutting cycle in August 2024, a surprise reduction in interest rates to 7.5% ahead of market forecasts, which expected the rate-cutting cycle to commence in the latter half of 2024.
“While further rate cuts are expected over 2024 and 2025, we do not expect this to induce a material recovery in the property market in the near term. The effect of rate cuts is likely to impact the property market with a 12-18-month lag. We therefore only expect conditions to improve in the medium term,” she said.
Meanwhile, the growth in sales of residential plots moved out of double-digit contractionary territory but remained in contraction at 9.5% in Q2-2024 from -21.5% y/y at the end of Q1-2024 and -22.4% y/y recorded at the end of Q2-2023.
