By: Nghiinomenwa Erastus
Looking at your income, can you afford a monthly instalment on a N$786 000 mortgage or rent a 1-bedroom flat at around N$3 656?
These are the average cost of houses and rent prices at the end of 2021. A 1-bedroom in the country will require you to have around N$3 656, while if you want to buy a house, the national weighted average cost for a house is N$1,18 million.
This is according to the FNB Residential Rental and the Residential Property Report analysis for the 4th Quarter of 2021 released at the end of March and in April 2022, respectively.
The FNB Residential Property Report uses bond values registered at the deeds office as a proxy for house prices as a general guide to property values in the country.
The housing report indicated that at the national level, those who seek to buy a house around the country must be prepared to pay plus or minus N$1,18 million. According to the weighted average calculated for the towns assessed.
However, the prices change with every town around the country- with some towns selling houses below the weighted average, such as those in the southern and northern parts of the country.
For those planning to buy a house from the southern towns, the 3-months average as calculated by FNB researcher shows that one needs to budget or at least have a pre-approval of -/+ N$786 000.
The southern towns are the cheapest in terms of housing prices ranking. Northern towns follow, where the 3-months average shows that houses on that side of the country will command plus or minus N$867 000.
The north and the southern sides are the only places where one will find a house costing less than a million, according to the bond values assessed by FNB researchers.
The central and coastal parts of the country’s average house prices are all above the national average.
To experience the coastal breeze, the weighted 3-months average shows that one needs to budget or have access to funding of around N$1,32 million to afford a completed house in the coastal area.
The country’s central area, which includes the capital city, is battling urbanization and ghetto influx. The bond values assessed as a proxy for house prices indicated a 3-month average house price of N$1,50 million.
According to the housing report, those planning to acquire a house in the central region should budget or have access to more funding than when one is buying elsewhere.
The researcher for the report, Uusiku Frans, also highlighted that house buying in the country has been significantly driven by low-interest rates (cost of money).
“The cumulative reduction in interest rate stimulated a strong surge in home buying,” he wrote.
However, the country has now reverted back to tight monetary policy (high-interest rate for borrowing).
RENTAL COST
FNB researcher Frans compiled daily rental adverts on The Namibian and Republikein Newspapers, which were aggregated and averaged monthly to give the country’s rental picture.
For those planning to move out of their parents’ houses for a minimal cost, the national weighted average rental price for all segments stands at N$6 728.
This average reflects more the cost of one and two bedrooms given their weight on the average calculation.
For starters, the commercial rental prices advertised by the end of December 2021 show that for a one-bedroom, one needs to be prepared to pay around N$3 656 a month on average around the country.
According to FNB’s rental report, budget -/+ N$6 424 a month if you seek a two-bedroom.
A 3-bedroom rent has averaged N$9 689 a month by the end of December 2021 for those with families to house. While those who need more than three bedrooms must be prepared to pay around N$18 787 a month.
Depending on the town you are renting, towns like Omuthiya, Ondangwa and Tsumeb offer lower rental prices than central and coastal areas.
Frans also indicated that landlords are ditching deposits on rent according to their rent-to deposit ratio, which keeps dwindling.
He said the continual removal of deposits highlights a systematic affordability issue across the Namibian economy.
Frans also noted in the report that only 10 782 rental units were listed last year, the lowest number of units since 2018, which could indicate a high absorption rate as tenants take advantage of low rent prices.
Email: erastus@thevillager.com.na
