‘Property market – the investment way to go’

THE residential property market in Namibia is seen as strong and is foreseen to remain buoyant due to a positive macroeconomic environment that has raised disposable income as a result of lower inflation and interest rates.

This view was expressed in the First National Bank (FNB) Housing Index launched on Friday – the first such index in Namibia – which will publish data and trends on the property market every four months. The index was based on valuations by the FNB home-loan department and not on purchase price.The drafters of the index felt that it would be reflective of the complete Namibian situation, as FNB has a sample size of 45 per cent of the property market share.The index used 2001 as a base year.People packed a conference room at the NamPower Convention Centre in Windhoek to listen to a presentation on the FNB Housing Index – on how it was compiled and its findings – delivered by FNB economist Martin Mwinga, who is also the Portfolio Manager for RMB Asset Management.The FNB Housing Index presented was for quarter four – October to December – of 2005.Attendants heard that the property market was a good investment tool, as statistics revealed that since 2001, there has been an increase in both the demand for and prices of property in all regions of the country.Mwinga said this was likely to continue and there was no bubble burst on the horizon yet.”The housing market is still in its expansionary phase and has not peaked yet.With structural decline in inflation and lower interest rate, the property market remains an excellent investment vehicle,” said Mwinga.The prime lending rate currently stands at 11,75 per cent and is likely to stay at that mark, as the repo rate is expected to remain unchanged at seven per cent this year, as forecast in the latest Reuters Econometer.Mwinga also gave a detailed presentation on how different residential suburbs in Windhoek were performing on the market.The key drivers of the residential property market were outlined as economic cycles, population growth and migration, disposable income and employment, interest rate and inflation.Mwinga said the property market would definitely benefit from expected major infrastructure expenditure by the Government on the back of Vision 2030.The new index contains useful information on all the regions, except the Omaheke Region, and how the property market has been performing in each particular area.Windhoek dominates with the highest land valuation, showing that property values have increased by 90 per cent in the capital since 2001.An overall analysis of the residential property market from 1993 to last year indicates that the value of houses in Namibia increased by around 100 per cent, while the increase from 2001 to 2005 was about 50 per cent.FNB Group Chief Executive Officer, Vekuii Rukoro said the Housing Index should be the custodian of the National Planning Commission.He said he hoped there would soon be a national housing index to which all the parties involved in the property business would contribute, and which would be made available to the public.”The FNB Housing Index will help customers make informed economic decisions when investing in property,” Rukoro said.The index is available at FNB branches and will soon be on the bank’s website.The index was based on valuations by the FNB home-loan department and not on purchase price.The drafters of the index felt that it would be reflective of the complete Namibian situation, as FNB has a sample size of 45 per cent of the property market share.The index used 2001 as a base year.People packed a conference room at the NamPower Convention Centre in Windhoek to listen to a presentation on the FNB Housing Index – on how it was compiled and its findings – delivered by FNB economist Martin Mwinga, who is also the Portfolio Manager for RMB Asset Management.The FNB Housing Index presented was for quarter four – October to December – of 2005.Attendants heard that the property market was a good investment tool, as statistics revealed that since 2001, there has been an increase in both the demand for and prices of property in all regions of the country.Mwinga said this was likely to continue and there was no bubble burst on the horizon yet.”The housing market is still in its expansionary phase and has not peaked yet.With structural decline in inflation and lower interest rate, the property market remains an excellent investment vehicle,” said Mwinga.The prime lending rate currently stands at 11,75 per cent and is likely to stay at that mark, as the repo rate is expected to remain unchanged at seven per cent this year, as forecast in the latest Reuters Econometer.Mwinga also gave a detailed presentation on how different residential suburbs in Windhoek were performing on the market.The key drivers of the residential property market were outlined as economic cycles, population growth and migration, disposable income and employment, interest rate and inflation.Mwinga said the property market would definitely benefit from expected major infrastructure expenditure by the Government on the back of Vision 2030.The new index contains useful information on all the regions, except the Omaheke Region, and how the property market has been performing in each particular area.Windhoek dominates with the highest land valuation, showing that property values have increased by 90 per cent in the capital since 2001.An overall analysis of the residential property market from 1993 to last year indicates that the value of houses in Namibia increased by around 100 per cent, while the increase from 2001 to 2005 was about 50 per cent.FNB Group Chief Executive Officer, Vekuii Rukoro said the Housing Index should be the custodian of the National Planning Commission.He said he hoped there would soon be a national housing index to which all the parties involved in the property business would contribute, and which would be made available to the public.”The FNB Housing Index will help customers make informed economic decisions when investing in property,” Rukoro said.The index is available at FNB branches and will soon be on the bank’s website.