More houses bring prices down

The FNB House Price Index fell by a further 5.2 index points in November 2012 as the number of properties traded continued to increase. Namene Kalili, Manager Research and Competitor Intelligence at FNB Namibia stated, “A number of new developments pushed up the volume index and introduced new and cheaper housing stock in the market. The volume growth was spurred on by new housing developments in Okahandja, Walvis Bay and Windhoek.”
Kalili added that more importantly, volumes continue to recover in the lower price segment which struggled with structural supply throughout 2011. “For the first time in a very long time the central market is trading more properties than the monthly average back in 2007 and it is this supply which is lowering house prices for the moment,” he declared. At the same time, however, Kalili also advised that there was very little evidence of sustained volume growth over the short term to contain house prices for much longer and therefore house prices were expected to rebound once this flurry of new affordable housing subsides.
The central property prices continued to fall during November and this time by 8% month on month. According to the report, National Housing Enterprise was largely responsible for the decline in house prices as they added new housing stock to the lower end of the middle price segment. “Therefore medium term volume growth prospects for the central market remain weak, with limited support from developers as a mere 4,200m² of land was mortgaged during the month, capable of yielding 10 free standing homes,” Kalili said.