Housing prices and purchases climb during Quarter 1

Key Highlights

• The FNB House Price Index printed a 12-month average growth rate of 9.4% at the end of the 1Q25 compared to 8.7% at the end of the 4Q24 and 0.3% in 1Q24.
• The 12-month national weighted average house price was recorded at N$1,345,270 in 1Q25 a slight increase of 1.9% from N$1,319,987 in 4Q24 and significantly above the observed N$1,229,776 by 8.6% in 1Q24.
• Volumes growth surged to 10.0% in 1Q25 on a 12-month average which is considerably above the 0.9% recorded in 4Q24 and -26.0% in 1Q24.

The annual average growth rate of 9.4% is the highest growth recorded since the Index moved out of contraction at the end of March 2023.

Land Delivery

Residential plot sales growth eased to 8.2% with a total of 85 plots sold in 1Q25 from a high of 20.2% with a total of 150 plots in 4Q24 but is significantly above the -21.5% growth recorded in 1Q24.

The growth in 1Q25 is mainly driven by the central, coastal and southern regions where growth rates posted at 6.2%, 2.2% and 73.8%, respectively. The southern region remains susceptible to large statistical variances due to base effects.

Moreover, the northern region fell into contraction with growth coming in at -6.5% in 1Q25.

The FNB House Price Index is showing signs of recovery due to a significant increase in buying activity during the first quarter of 2025 as housing prices remain resilient. A small proportion of the population seem to be driving the improved consumer sentiment for the increasing demand for residential property coupled with the limited supply in housing. There is increased local investment in rental properties to accommodate rising demand from incoming professionals and expatriates.

Regionally, the housing prices for the central, coastal, and northern and southern regions all posted growth with the southern region moving out of contraction since 3Q24. From a supply side perspective, transaction volumes improved substantially for most regions whilst the northern region remained in contraction albeit lower.

Government has serviced 1 772 plots over the past financial year and has allocated N$445m in the new fiscal year to construct 3 000 housing units throughout the country to assist in alleviating the supply pressures currently being faced. The Ministry of Urban and Rural Development aims to service about 10,000 plots annually, with half (about 5,000) being earmarked for the Khomas region and the rest of the regions receiving the other half. These initiatives, if implemented, should help reduce the current backlog of 300,000 plots throughout the country that need to be serviced and provide individuals with more options for the growing housing demand. This coupled with the various funding sources from banking institutions and investment funds could assist the broader consumer base in purchasing property.

Looking ahead, we expect housing prices to remain elevated with increased demand by individuals who can afford property through alternative funding sources. Moreover, foreign interest should continue to bolster buying activity. The FNB House Price Index has rebounded despite the sluggish pace in mortgage credit demanded by households and the residential property market is booming.

For more information, please call: 061 – 299 2222 or visit www.fnbnamibia.com.na