Stefanus Nashama
Namibia’s property market has witnessed minimal growth since the onset of the economic downturn in 2015/16.
This is according to Adrian Gläser, an equity associate at Curris Capital.
According to Gläser, the national rental index, which reflects the average rent charges, has remained stagnant since 2016 and has subsequently fluctuated around minimal growth levels.
“When adjusted for inflation, this indicates that the real value of average rents decreased to about 68 percent of their 2016 levels,” he said.
Gläser further stated that the national housing index, which tracks average house sale values, performed slightly better.
“It stands only 11.5 percent higher than at the start of 2016, translating to a compounded annual growth rate of 1.26 percent. However, this growth is still well below inflation and significantly trails behind regional and global trends,” he said.
He stressed that Namibia’s economy is currently experiencing sustained growth, as evidenced by 12 consecutive quarters of real GDP expansion and the emergence of several positive indicators.
Consequently, it seems likely that the local property market will improve in the medium term, he stated.
Gläser added that increasing costs for raw materials and labour had caused the replacement cost of current properties to occasionally double the current market prices.
“This makes purchasing property more economical than building a new property,” he said.
According to him, property values must rise before new developments can occur and more stock is added to the market.
“Seeing increased and growing rental demand amid limited supply should lead to higher rent charges, helping them catch up with inflation-adjusted levels from previous years and boosting property values in turn,” he said.
