Market Review - Oct/Nov '25
Slowdown in housing prices while buying activity remains buoyant
Slowdown in housing prices while buying activity remains buoyant
Key Highlights
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The FNB House Price Index grew by 7.7% on a 12-month average at the end of the 2Q25, a slowdown compared to the 9.4% growth rate in 1Q25 but significantly above the 1.7% growth recorded in 2Q24.
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The 12-month national weighted average house price was recorded at N$1,360,664 in 2Q25, a marginal increase from N$1,345,270 in 1Q25 but noticeably higher than N$1,263,673 in 2Q24.
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Volumes growth continued to surge, posting at 15.5% in 2Q25 on a 12-month average from 10.0% in 1Q25 and rebounded from -17.7% in 2Q24.
The Namibian residential property market continues to show resilience, with transaction volumes steadily increasing despite a moderation in house price growth. Prices remain relatively high, reflecting sustained demand. These movements are supported by increased local investment in rental housing to meet rising medium term accommodation needs, alongside interest from foreign buyers.
Contrary, mortgage credit uptake by households remains subdued, growing by 0.2% m/m in July 2025, down from 0.3% in June. Annually however, growth saw a marginal uptick to 0.8% y/y in July 2025 from 0.5% in June. This muted performance in mortgage credit could be positively influenced by the Bank of Namibia’s directive for commercial banks to reduce the lending spread by 25 basis points by year-end.
With the repo rate currently at 6.75%, this measure is expected to ease borrowing costs and stimulate broader participation in the mortgage market.
Additionally, municipalities across the country have expressed intent to accelerate the servicing of plots, which, combined with easing lending costs, should improve access to residential property for a wider consumer base.
Looking ahead, these dynamics signal a robust outlook for the housing sector with demand expected to remain strong, driven by local investment and efforts to increase the supply of land.
Conclusion
The sustained growth in the FNB House Price Index is underpinned by continued momentum in buying activity and elevated housing prices. Growth in both house prices and transaction volumes is evident across most regions, except for the coastal region, which experienced a contraction. Meanwhile, land delivery declined in the second quarter of 2025, driven by reduced activity in most regions — though the coastal region showed improvement.
The government has indicated that approximately 1,064 plots are either partially serviced or currently undergoing full servicing. In addition, around 1,007 residential plots are expected to become available in the northern region following the formalization of six informal settlements into townships. These developments represent some progress toward addressing the national backlog of 300,000 plots that still require servicing.
Looking ahead, housing prices are projected to remain elevated due to the limited supply of homes and the slow pace of serviced land coupled with the increased demand anticipated from easing borrowing costs, driven by the Bank of Namibia’s directive for commercial banks to reduce lending margins. These dynamics point to a resilient and optimistic outlook for the housing sector.
For more information, please call: 061 – 299 2222 or visit www.fnbnamibia.com.na
