02 Feb 2016 17:50pm
WINDHOEK, 01 FEB (NAMPA) - Home owners preferred to buy houses in the Khomasdal, Academia, Omeya, Elisenheim and Okurayangava residential areas more than other parts of the city during the fourth quarter of 2015.
This was due to affordability.
The latest housing index issued on Tuesday indicated that there has been a 63 per cent increase in demand in Academia, while in Cimbebasia the demand has dropped by 50 per cent. Other areas where the demand for housing fell include Eros (55 per cent), Hochland Park (41 per cent), Dorado Park (23 per cent) and Rocky Crest (27 per cent).
The preference in choice of living seems to be a pricing matter and this is supported with evidence from the growth across different sectors. Property between N.dollars 1 million an N.dollars 2 million is where the main growth sits - at 47 per cent year on year, First National Bank Group Market Research Manager Daniel Kavishe was quoted as saying in the index.
Meanwhile, the Deeds Office recorded a 40 per cent drop in transactions year-on-year due to a slowdown in purchases in the northern and central towns of Namibia.
However, transaction growth at the coast remained steady at 10 per cent year-on-year supported by development in Swakopmund. In the southern part of the country, transactions at Lüderitz doubled due to the low cost developments in Lüderitzs Benguela area.
These transactions, combined with developments at the coast, pulled the median house price down to N.dollars 694 000.
Kavishe noted that there still exists a large migration from either smaller towns to the city, or from rural areas to the city. Predominantly, this has created property hotspots within an area like Windhoek.
Up north, Ongwediva and Rundu are towns that are fast growing but still offer reasonable prices for property. Median price in Ongwediva is hovering in the N.dollars 500 000 mark, while in Rundu, it edges towards N.dollars 650 000.
In Walvis Bay, the median price is N.dollars 725 000 for stand sizes up to 400 square meters. Several areas in Swakopmund reflect median price of N.dollars 900 000 but stand sizes are as large as 586 square metres.
Kavishe advised new homebuyers to consider these towns as well before completely discrediting the housing market.
Data suggested that a massive supply of low cost housing over consecutive months would re-price the market downwards, thereby improving affordability across the country, he said.
Managing the demand tactics will only mask the problem temporarily but will not resolve the problem. The interest rate environment in Namibia is bound to change drastically over the course of 2016 and that will not bode favourably with the already indebted consumer.
Irrespective of inflation and general economic slowdown expectations for 2016, consumers will face headwinds on the back on the rise cost of servicing their debt, he added.
Namibias housing market has changed considerably over the past five years as volume growth has increased by 30.5 per cent while prices have grown by an estimated 87.8 per cent across the board.