FNB Namibia Releases the Housing Index

“We at FNB Namibia would like this opportunity to share our findings from the FNB Namibia Housing Index. The data covers the whole of Namibia dating from January 2008 until February 2009 and include all home loans approved by the four commercial banks,” said Namene Kalili, FNB’s Manager for Research and Competitors Intelligence when releasing the FNB Housing Index in Windhoek.

Kalili said: “As per our methodology, we excluded transactions below N$100,000 and secondary mortgage bonds. The reason is simply these transactions do not reflect the true cost of housing in Namibia and as such it may distort the FNB Namibia Housing Index. We have also brought our house categories in line with the new transfer duties announced by the Minister of Finance whereby small houses ranging from N$100 000 to N$400 000, medium houses ranging from N$400 000 to N$800 000 and large houses are N$800 and above,” FNB’s Manager for Research and Competitors Intelligence pointed out.

The FNB Housing Index released information that: • the value index was rather stable in 2008 and declined in 2009 or • that the volume index was very volatile in 2008 and declined in 2009. He said that the FNB House Price Index started last year at N$327, 000 and meandered around that level for most part of the year before peaking in September and closing off the year 2% higher.

“Although this is significantly lower than inflation, house prices have remained stable given the financial conditions and remain a very good investment going forward,” he said. FNB’s Manager for Research and Competitors Intelligence argued that: “For 2008 the price for a small house remained unchanged, medium houses shed 0.2% of their value, while large houses appreciated by 20%. Central Namibia showed 7% growth, the coast showed a 10% growth, while Northern and Southern Namibia depreciated by 13 and 19% respectively,” he indicated.

Kalili stated that 3,500 houses were registered in 2008 of which half were in Windhoek and Okahandja pointing to a growing housing market outside Windhoek. “The overall demand for housing fell in 2008. More specifically housing demand in the central Namibia [Windhoek and Okahandja in particular] grew 10%, housing demand at the coast grew by 67% and declined by 8% in the North, FNB Housing Index revealed” he said.

He continued that there were numerous plots sold in the North Central Areas, “which are excluded from our findings because they fell below our N$100 000 threshhold, but nonetheless it holds excellent growth potential for housing demand going forward. With that said, I would like to conclude by saying that we at FNB Namibia expect house prices to stabilize going forward as housing demand increases despite the economic down turn,” FNB’s Manager for Research and Competitors Intelligence speculated.

“This view is supported by lower interest rates, salary increments for civil servants, N$600 Million income tax breaks and lower transfer duties. With FNB Namibia there is no better time to invest in property than the present,” Namene Kalili concluded.