The First National Bank Namibia Residential Rental Index posted an annual contraction of 3.1 per cent at the end of March 2021, bringing the national weighted average rent to N.dollars 6 686 from N.dollars 7 465 recorded in March 2020.
The rental index report issued on Tuesday indicates that the one-bedroom segment saw an annual rental contraction of 0.8 per cent reaching N.dollars 3 641, two-bedroom by 2.8 per cent reaching N.dollars 6 687 and three-bedroom by 0.1 per cent reaching N.dollars 9 636.
The only segment that showed annual growth in rent prices is the more-than-three-bedroom unit which registered a growth of 0.3 per cent to N.dollars 17 169.
These patterns highlight the widespread affordability issues amongst tenants and increased demand for multi-family renting units to support affordability in these economically challenging times, Frans Uusiku, FNB Market Research Manager said.
“Indeed, the incoming economic data for the first quarter of 2021 mirrors the deteriorating state of the rental market, with Gross Domestic Product growth recorded at -6.5 per cent from -2.5 per cent in the corresponding quarter of 2020. Suffice to say, a derailed economic recovery, which appears to have been prolonged by the third wave of COVID-19 and a low vaccination rate is poised to keep the rental market in a coma on the back of muted demand,” he said.
Uusiku said this would have far-reaching implications for the stability of the financial sector, with potentially unfavourable consequences such as depressed property sales.
The real estate and profession activities are amongst the five sectors that carried through the economy in the first quarter of 2021, realising growth of 4.6 per cent year-on-year (y/y) and this is further supported by considerable growth in home sales seen over the reviewed period.
Walvis Bay continue to top the list in terms of annual rental contractions with -44.4 per cent, followed by Oshakati with -33.9 per cent, Swakopmund with -28.4 per cent, Ondangwa with -20.7 per cent, Okahandja with -14.4 per cent, Gobabis with -14.2 per cent and Windhoek with -3.5 per cent.
“Conversely, rent in Tsumeb grew by 35.8 per cent, Rundu by 31.0 per cent and Ongwediva by 20.2 per cent y/y,” Uusiku added.
Source: Namibia Press Agency
