Jo-Maré Duddy – The price monster lost more than half its punching power in January compared to a year ago as the recession continues to takes its toll on the property market.
Figures released by the Namibia Statistics Agency (NSA) yesterday show annual overall inflation in Namibia in January was 2.1% - down from 4.7% a year ago.
Commenting on the drop, Capricorn Asset Management (CAM) said it was largely due for the negative rate for housing. The NSA figures show January’s annual inflation rate for rental payments for dwelling (both owners and renters) was -1.5% compared to 2.3% a year ago.
“The deflation in the property market is having its impact,” CAM said.
Rental payment is categorised under housing, water, electricity, gas and other fuels in the consumer price index (CPI), which carry the biggest weight in the Namibian consumer basket. According to the NSA, housing, water, electricity, gas and other fuels weight 28.36, which means the average consumer spends N$28.36 out of every N$100 in his pocket on this.
Namibia entered recession for the first time in 2016 in the current economic slump. January’s annual inflation rate for housing, water, electricity, gas and other fuels peaked at 9.7% in 2017. The following year it plummeted to 2.6%.
FNB Namibia’s latest Rent Price Index recorded a contraction of 1.9% at the end of the third quarter last year.
“The price dynamics in the rental market have brought the national rent price at the end of September to N$7 163.94 per month. The rental market remains overall negative owing to the persistent weak domestic economy,” FNB Namibia’s group economist, Ruusa Nandago, said when she released the latest data last month.
“We expect rental price growth to remain in contraction for the remainder of the year and to move into positive territory early next year, likely settling in the range of 1-2%,” Nandago said.
Food and non-alcoholic beverages, transport, as well as alcoholic beverages and tobacco – the other heavyweights in the consumer basket – also retreated significantly.
Annual food and non-alcoholic beverages inflation – with a weight of 16.45 – last month was 2.2%. A year ago it was 5.7%.
January’s figure for transport was 5.0%, down from 7.3% in January 2019. The category carries a weight of 14.28.
Alcoholic beverages and tobacco recorded an annual rate of 2.6% compared to 6.4% in January 2019. The average consumer spends N$12.59 out of every N$100 on alcohol and tobacco.[email protected]