Slow contraction recorded in rental prices for May 2019

Rental prices recorded a slow contraction of three per cent at the end of May 2019 countrywide, the latest FNB Rental Index shows.

The index which was released on Thursday shows that the national average rent price now stands at N.dollars 7 387 in May 2019 compared to N.dollars 7346 the same time last year.

The average deposit charged at the end of May contracted sharply by 22 per cent year-on-year compared to a contraction of 11,8 per cent recorded in March.

Deposits charged in the more than three bedrooms segment remained positive at two per cent year-on-year which was counteracted by significant contractions in the deposits charged in the one, two and three bedroom segments of 15,4 per cent, 25,3 per cent and 28,5 per cent respectively.

The severe contraction illustrates willingness by landlords to bargain downwards on deposit levels to attract and secure tenants, and is further substantiated by the growth in the deposit-to-rent ratio which has slowed down to 8,1 per cent, the lowest recorded since August 2011, Market Research Manager at FirstRand Namibia, RuusaNandago explained in a statement issued on Thursday.

'Lower charges of rental deposits are archetypal of fragile economic conditions and strained consumer demand for rental units, which puts landlords under immense pressure, Nandago said.

The Bank further has a negative projections for rental prices and a recovery in the market at a slow pace, however, growth concerns persists.

Source: Namibia Press Agency