Namibia’s property market has witnessed a staggering 1,258% surge in average housing prices between January 1990 and March 2023, it has been revealed.
According to Simonis Storm, the average house in Namibia today costs 13 times more than it did over three decades ago.
The research firm’s market overview of Namibia’s property and housing revealed that the significant increase in property values raises concerns, particularly for the younger generation aged between 18 and 35, who face an estimated unemployment rate of nearly 60%.
“Affording housing, which has become 13 times more expensive, is becoming an increasingly daunting prospect for them. One critical aspect that remains unclear due to the lack of comprehensive salary data is whether average salaries have kept pace with the rampant inflation in housing prices,” Simonis and Storm said in a report.
This comes as the average income for Namibians has not risen in tandem with the soaring cost of living, exacerbating income inequality.
“It’s worth noting that a substantial portion of Namibia’s workforce, approximately 45%, comprises public servants who have not received any wage increases between 2015 and 2022, further adding to the economic challenges faced by many citizens,” reports Simonis Storm.
The research firm highlighted that some properties were built for a fraction of their selling price from 2010 to 2015, prompting questions about the fundamental drivers of such price increases.
“While it may be argued that such profit margins seem unjustifiable, the sheer demand for housing during this period suggests a different narrative. High demand for housing was a key factor contributing to these price hikes, reflecting the urgency of the housing issue in the country.”
Analysing the historical data, Simonis Storm revealed that it is evident that the average housing price increases in Namibia experienced fluctuations over the years.
“Between 1990 and 2000, prices rose by an average of 8% annually. This annual increase accelerated to 10% between 2000 and 2010 and reached an astonishing 15% between 2010 and 2015,” the firm noted.
However, Simonis Storm stated that since 2015, average house prices have been increasing at a more modest rate of 2% per year, culminating in the figures observed in 2023.
Furthermore, the report notes that the central area of Namibia has seen the most rapid growth in average housing prices, closely followed by the coastal, northern, and southern regions.
“While the coastal and central house prices had diverged between 2016 and 2022, recent data from 1Q2023 indicates a narrowing gap, with coastal houses now the most expensive (averaging N$1.6 million), followed by the central area (N$1.5 million), the North (N$869,000), and the South (N$795,000).”
Meanwhile, rental prices have also followed an interesting trajectory as between 1990 and 2015, they showed steady growth but have plateaued since then.
Simonis Storm reveals that houses with more than three bedrooms experienced the highest rent increases, averaging 11.3% per year over the past two decades.
However, surprisingly single-bedroom houses saw the second-largest annual increase in rent at 6.8%, outpacing two-bedroom (6.4%) and three-bedroom (6.3%) homes.
“This could be attributed to changing lifestyles, with more people opting to live alone at later stages of life. On average, monthly rents across Namibia have surged by 191% from January 2002 to March 2023, nearly tripling over two decades,” the firm revealed.
This comes as the First National Bank (FNB) data reveals a consistent rise in average monthly rent across Namibia until 2017, reaching a peak of N$11,407 per month in February 2017.
Simonis Storm adds that since then, rent has experienced a declining trend, reaching a low of N$5,804 in December 2022 but rebounding slightly to N$7,156 by March 2023.
“The factors driving these fluctuations in both house prices and rental rates since 2015 are complex and warrant further investigation,” said the research firm.
The overview highlights that over the last 20 years, house prices increased by 421% on average.
