19 April 2021 | Geschäft

'Buy a house now and sell it later'

The FNB House Price Index posted an annual growth of 3.5% year-on-year at the end of 2020 compared to -4.7% year-on-year recorded over the same period in 2019.

This could be attributed to sales of high valued properties at prices below valuation. Frans Uusiku, Market Research Manager: FNB

PHILLEPUS UUSIKU

The housing market is surely making a much more pronounced recovery than most other segments of the economy.

For as long as interest rates remain at current levels, the medium housing segment priced between N$1.5 million to N$3.5 million is expected to remain relatively attractive in 2021 and beyond. This demand is likely to be supported by numbers of first-time buyers with a long-term investment mindset.

According to First National Bank (FNB’s) market research manager Frans Uusiku, the medium housing segment is the only segment that saw an improvement in the share of volumes traded from 15% in 2019 to 17% in 2020.

“This could be attributed to sales of high valued properties at prices below valuation, and further justifies the sustained growth in house prices under a tough economic environment,” he added.

Overall, the FNB House Price Index posted an annual growth of 3.5% year-on-year at the end of 2020 compared to -4.7% year-on-year recorded over the same period in 2019. The national weighted average house price ended the year at N$1 240 943 compared to N$1 154 468 recorded in 2019.

Uusiku notes that the key takeaways of Namibia’s property market are the declined in the average age for home buyers from 51 years in 2010 to 39 years in 2020.

Secondly, women are increasing their participation in the housing market across all property portfolios.

Similarly, the joint bond segment has seen a decline in the share of transactional volumes from 31% in 2019 to 29% in 2020.

Lastly, affordability continues to be concentrated within the small housing segment despite reflecting a slight decrease in the share of volumes traded from 82% in 2019 to 81% in 2020, he said.

Land delivery

The pace of land delivery started off on a strong footing in 2020 with the year-on-year growth of 86.2% recorded in January 2020. However, the momentum around land delivery has since deteriorated towards the end of the year, with only 6.9% year-on-year growth achieved at the end of December 2020 compared to 50.6% year-on-year realized over the corresponding period of 2019, he said

Urban land delivery is an important cornerstone in addressing the housing backlog and has been outlined as one of the priority interventions under the Harambe Prosperity Plan II. The Plan promises to deliver 24 000 erven for the next five years, covering Windhoek, Walvis Bay, Otjiwarongo, Gobabis, Eenhana, Ongwediva, Ondangwa, Oshakati and Rundu, Uusiku pointed out.

The acceleration of land servicing requires all hands-on-deck, a continued political will and smart partnership between the local authorities and financial institutions to give optimal effect to the aspirations of government.

The Southern Residential Property Price Index posted largest growth of 20.4% year-on-year in December 2020, followed by the coastal, central and northern index, recording a growth of 10.6%, 3.1% and -1.6%, respectively.

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