CHAMWE KAIRA
Structural challenges, particularly delays in land servicing and the limited delivery of serviced plots, continue to constrain housing supply, while broader economic conditions hinder a more inclusive recovery in housing market participation.
This is according to the latest FNB House Price Index, which shows that residential plot sales remained in contraction during the second quarter of 2026, although the pace of decline moderated.
Plot sales fell by 26.7% year-on-year in the second quarter, compared with a 32.0% contraction in the first quarter and a 13.1% decline recorded in the second quarter of 2025.
The weakness was broad-based, with all major regions remaining in contraction during the quarter.
On a 12-month average basis, residential plot sales declined by 33.3% in the central region, 44.3% in the coastal region, 14.5% in the northern region and 0.4% in the southern region.
FNB noted that the southern region continues to experience heightened volatility because of its relatively small market size, making it particularly susceptible to base effects and large statistical fluctuations.
Despite the weakness in plot sales, land prices recorded a sharp turnaround. The average price per square metre increased by 35.1% in the central region, 21.6% in the coastal region and 38.3% in both the northern and southern regions, reversing the price declines recorded in the previous quarter.
The broader residential property market also remained resilient, with house prices increasing by 7.4% year-on-year in the second quarter.
However, transaction volume growth slowed to 2.8%, pointing to a widening divergence between prices and activity.
FNB said the divergence suggests that house prices are being supported more by structural supply constraints than by broad-based growth in demand. These constraints include shortages of serviced land, limited housing stock and elevated construction costs.
Price growth remained strongest in the central and coastal markets, supported by stronger economic activity and demand from higher-income households and foreign buyers.
Transaction volumes, meanwhile, generally moderated across most regions. The small housing segment recorded the largest contraction in activity, while the medium and large segments showed some improvement, indicating greater resilience among higher-value properties.
Mortgage credit growth to households showed some recovery, rising to 2.1% year-on-year in June 2026. FNB cautioned, however, that the improvement was from a relatively low base and did not yet signal a broad-based recovery in housing demand.
Household finances remain under pressure from elevated living costs and affordability constraints, limiting the ability of many prospective buyers to take on additional mortgage debt.
As a result, residential property activity is becoming increasingly concentrated among higher-income households and foreign buyers, who generally have stronger balance sheets and greater access to cash funding.
The Bank of Namibia’s decision to raise the repo rate by 25 basis points in June is also expected to weigh on demand for long-term credit and mortgage borrowing.
Despite these challenges, FNB expects Namibia’s residential property market to remain relatively resilient in the near term.
Persistent shortages of serviced land and limited housing supply are expected to continue supporting house price growth, particularly in the central and coastal regions.
Affordability constraints are likely to continue limiting activity in the lower-value segment, although improving mortgage credit growth, sustained economic activity and stronger demand in the medium- and upper-value segments provide grounds for cautious optimism.
Over the medium term, FNB said accelerated land servicing, increased housing delivery and firmer income growth could help broaden market participation and support a more balanced expansion of Namibia’s housing market.
