Okakarara is the cheapest town to buy a house

Okakarara is currently the cheapest place to buy a house in Namibia.

This is according to the latest House Price Index released by First National Bank (FNB) Namibia.
The index also shows that houses are much cheaper in the southern part of Namibia.

On average, a house costs N$374 000 at Okakarara, compared to N$1,3 million in Windhoek.

The most expensive houses are found in Windhoek, at Swakopmund (N$1,3 million), Oniipa (N$1,06 million) and Henties Bay (N$1,1 million).

The average prices for the central, coastal, northern and southern regions stand at N$1,5 million, N$1,3 million, N$864 000 and N$881 000, respectively.

“The FNB House Price Index printed a 12-month average growth of 1,5% at the end of the fourth quarter in 2023, compared to a growth of 3,3% at the end of quarter three in 2023,” said FNB spokesperson Hileni Amadhila.

However, there has been a decline in the number of houses purchased, attributed to the high interest rate and inflation.

“This limits the ability for consumers to spend on assets such as housing, as the focus is on supplementing disposable income which has come under pressure in the prevailing environment,” said Amadhila.

Economist Ruusa Nandago said buying activity in the residential property market has declined and remains low across the country.

“The subdued buying activity is aligned to the elevated interest rate and inflation environment which has weighed on consumer health in the context of high levels of indebtedness among households, which currently stands at 86%,” said Nandago.

Additionally, unsecured loans (like credit cards) are growing much faster than mortgages.

“We maintain our view that the residential property market will remain constrained as affordability bottlenecks persist,” said Nandago.

According to the report, the total value of new mortgage loans increased by 3% compared to the average of the previous 12 months, while new unsecured loans grew by 11,1%

This suggests people are borrowing more to cover everyday expenses than they are to buy houses.

Mortgage credit is used for buying a house, while unsecured credit is a loan not tied to a specific asset, like a credit card or personal loan.

“With rising default rates observed, we continue to expect buying activity to remain constrained over the remainder of 2024 and the first half of 2025, as the cutting cycle will be too shallow to induce a significant rebound in the residential property market,” said Nandago.

According to the report, the sale of residential plots also declined by 28,5%, compared to the same period last year.

The slowdown is happening across all regions, though some areas are affected more severely.

The central and northern regions have the biggest decline in sales, with declines of 33,1% and 36,7%, respectively.

The coastal region has a moderate decline of 18,5%, while the south has the least impacted sales with a contraction of only 2%.