Property prices look bleak
Second quarter activity will likely print lower home sales figures, FNB Namibia says.
Phillepus Uusiku -The outlook for property prices looks bleak from a market perspective as widespread job losses and income uncertainty induced by Covid-19 do not bode well for demand.
The flurry of trading activity in the small and medium-housing segments is becoming a new normal in the Namibian residential property market. This could be ascribed to affordability issues and inherent high levels of income inequality that are compounded by a smaller population, says the market research manager at FNB Namibia, Frans Uusiku.
Uusiku adds that “whether property investment is still regarded as safe haven in the context of current economic conditions is becoming a recurring theme”.
The FNB House Price Index posted a contraction of 5.9% year-on-year at the end of March 2020 compared to a contraction of 1.5% recorded over the same period of 2019. This brought the average national house price to a 5-year record low of N$1 038 577 as at March 2020, he pointed out.
Although data contained within the report is unlikely to reflect the economic impact of Covid-19, second quarter activity will likely print lower home sales figures, which may exert further downward pressure on price growth.
“We continue to view affordability of houses in the large and luxury segments as a stumbling issue, we see deferment in buying decisions in anticipation of a further drop in prices and an improvement in the delivery of land as some of the themes shaping the outlook for the residential property market,” Uusiku says.
Central market
Overall house prices in the central and coastal regions have remained buoyant, registering growth of 8.2% year-on-year and 7.2% year-on-year over the first quarter respectively. This was overshadowed by steep contractions of 18.7% year-on-year and 13.6% year-on-year recorded in the northern and southern regions respectively, Uusiku says.
Central residential property prices grew by 8.2% year-on-year in the first quarter of 2020 compared to a contraction of 13.8% year-on-year recorded over the same period of 2019.
A house in the central region is now priced at N$1.353 million. On a 12-month rolling average, a house in Windhoek is now priced at N$1.2 million, having contracted by 0.4% quarter-on-quarter and 15.9% year-on-year. Alongside, a house in Okahandja and Gobabis is now priced at N$709 000 and N$679 000, respectively, Uusiku pointed out.
Regions
The coastal region recorded house price growth of 7.3% year-on-year in the first quarter of 2020 compared to 9.7% year-on-year recorded a year ago. The average house price in the coastal region is now recorded at N$1.119 million.
Although overall property prices in this region remains in positive territory, the average annual house prices in Swakopmund and Walvis Bay have been on a downward slope, with the first quarter price recorded at N$790 000, N$740 000 compared to N$1.1 million and N$879 000 recorded over the same period in 2019, respectively, Uusiku says.
Northern house prices have continued to weaken, posting a 4-year record contraction of 18.7% year-on-year at the end of March 2020.
The average house price in the Northern regions is now at N$749 000. The significant drop in prices were more evident in Ongwediva, Oshakati and Ondangwa, which contracted by 15.8%, 15.0% and 8.2% year-on-year, respectively, he says.
The southern region which is predominantly characterised by the small housing segment recorded a contraction in house prices of 13.6% year-on-year compared to a growth of 15.9% year-on-year recorded a year ago.
The observed large variations in price and volume growth over the years in this region appears to signify a slow pace of development and minimal trading activity in the region, he pointed out.
The flurry of trading activity in the small and medium-housing segments is becoming a new normal in the Namibian residential property market. This could be ascribed to affordability issues and inherent high levels of income inequality that are compounded by a smaller population, says the market research manager at FNB Namibia, Frans Uusiku.
Uusiku adds that “whether property investment is still regarded as safe haven in the context of current economic conditions is becoming a recurring theme”.
The FNB House Price Index posted a contraction of 5.9% year-on-year at the end of March 2020 compared to a contraction of 1.5% recorded over the same period of 2019. This brought the average national house price to a 5-year record low of N$1 038 577 as at March 2020, he pointed out.
Although data contained within the report is unlikely to reflect the economic impact of Covid-19, second quarter activity will likely print lower home sales figures, which may exert further downward pressure on price growth.
“We continue to view affordability of houses in the large and luxury segments as a stumbling issue, we see deferment in buying decisions in anticipation of a further drop in prices and an improvement in the delivery of land as some of the themes shaping the outlook for the residential property market,” Uusiku says.
Central market
Overall house prices in the central and coastal regions have remained buoyant, registering growth of 8.2% year-on-year and 7.2% year-on-year over the first quarter respectively. This was overshadowed by steep contractions of 18.7% year-on-year and 13.6% year-on-year recorded in the northern and southern regions respectively, Uusiku says.
Central residential property prices grew by 8.2% year-on-year in the first quarter of 2020 compared to a contraction of 13.8% year-on-year recorded over the same period of 2019.
A house in the central region is now priced at N$1.353 million. On a 12-month rolling average, a house in Windhoek is now priced at N$1.2 million, having contracted by 0.4% quarter-on-quarter and 15.9% year-on-year. Alongside, a house in Okahandja and Gobabis is now priced at N$709 000 and N$679 000, respectively, Uusiku pointed out.
Regions
The coastal region recorded house price growth of 7.3% year-on-year in the first quarter of 2020 compared to 9.7% year-on-year recorded a year ago. The average house price in the coastal region is now recorded at N$1.119 million.
Although overall property prices in this region remains in positive territory, the average annual house prices in Swakopmund and Walvis Bay have been on a downward slope, with the first quarter price recorded at N$790 000, N$740 000 compared to N$1.1 million and N$879 000 recorded over the same period in 2019, respectively, Uusiku says.
Northern house prices have continued to weaken, posting a 4-year record contraction of 18.7% year-on-year at the end of March 2020.
The average house price in the Northern regions is now at N$749 000. The significant drop in prices were more evident in Ongwediva, Oshakati and Ondangwa, which contracted by 15.8%, 15.0% and 8.2% year-on-year, respectively, he says.
The southern region which is predominantly characterised by the small housing segment recorded a contraction in house prices of 13.6% year-on-year compared to a growth of 15.9% year-on-year recorded a year ago.
The observed large variations in price and volume growth over the years in this region appears to signify a slow pace of development and minimal trading activity in the region, he pointed out.
Kommentaar
Republikein
Geen kommentaar is op hierdie artikel gelaat nie