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Market Review - Jun/Jul '24

Prices and buying activity remained muted

Prices and buying activity remained muted

Fourth Quarter 2023: Key Highlights
The FNB House Price Index indicated a 12-month average growth of 1.5% at the end of Q4-2023 compared to a revised 3.3% in Q3-2023 and -1.9% in Q4-2022.

The 12-month national weighted average house price was recorded at N$1 214 674 during Q4-2023, slightly lower than the N$1 218 086 in Q3-2023 and up from N$1 196 569 over the corresponding period in 2022.

Volumes remain in contraction, with the 12-month average at -19.1% at the end of Q4-2023, from -27.7% at the end of Q3-2023 and lower than the -17.9% recorded in Q4-2022.




The FNB House Price Index revealed a 12-month average growth of 1.5% at the end of Q4-2023, compared to a growth of 3.3% at the end of Q3-2023 and -1.9% at the end of Q4-2022. The growth rates for the small, medium, large and luxury segments stood at 0.7%, -1.4%, 7.3% and 24.9% respectively. From a regional perspective, the coastal region once again recorded the strongest growth of 8.8%, while the central, northern and southern regions recorded growth rates of -2.5%, -0.2% and 6.1% respectively.

The overall national house price stood at N$1 214 674 during Q4-2023, slightly lower than N$1 218 086 in Q3-2023 but higher than N$1 196 569 over the corresponding period in 2022. The average prices for the central, coastal, northern and southern regions stood at N$1 550 000, N$1 398 000, N$864 000 and N$881 000 respectively.

Transaction volumes remain contractionary for the sixth consecutive quarter, at a 12-month average growth of -19.1% at the end of Q4-2023, from –27.7% in Q3-2023 and -17.9% in Q4-2022. The contraction in volumes was once again broad-based across all four regions. From a segment perspective, the contraction was observed in the small (-29.5%) and medium (-31.3%) segments, while the large and luxury segments recorded a 20.0% and 0.0% growth rate respectively. This signals that buying activity in the residential property market remained broadly subdued across the board.

The subdued buying activity is aligned to the elevated interest rate and inflation environment which has weighed on consumers, with indebtedness among households currently standing at 86.0%. Consumers are focusing on supplementing disposable income which has come under pressure in the prevailing environment. This view is corroborated by private sector credit extension numbers which show that household mortgage credit grew by 3.0% on 12-month rolling average basis in Q4-2023 compared to unsecured credit which grew by 11.1% over the same period.Inflation will moderate but remain sticky; the repo rate has peaked at 7.75% and the cutting cycle will commence in the latter half of 2024. FNB expects buying activity to remain constrained over the remainder of 2024 and the first half of 2025.

Along with recent LTV regulation adjustments, we note the allocation of N$700m for the upgrading of informal settlements, land servicing and provision for housing allocated in the 2024/25 budget. Furthermore, the brackets for transfer and stamp duties have been adjusted for inflation and the exemption level has been increased from N$600 000 to N$1 100 000 to improve access to housing.


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

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