Rental inflation softens slightly but remains high in urban centres

Rental inflation eased marginally to 4.8% year on year, indicating a slight moderation, although price pressures remain firmly elevated in major urban areas, according to the latest inflation data.

Simonis Storm economist Almandro Jansen says while rental pressures have stabilised temporarily, deeper market constraints continue to define housing affordability.

“Limited growth in new housing supply, slow land servicing and persistently high construction input costs continue to limit affordability, particularly in high-demand areas such as Windhoek, Swakopmund and Walvis Bay,” he says.

Jansen adds that recurrent adjustments to municipal tariffs and utility charges are worsening household expenditure pressures, reinforcing housing’s weight in the inflation calculation due to its 28.4% share of the consumer basket.

Looking ahead, Jansen says housing-related inflation is expected to remain firm into 2026.

“While the moderation in water and refuse inflation may offer short-term relief, rising energy-related costs, higher maintenance prices and ongoing supply-demand imbalances in the rental market are likely to sustain upward pressure on household living expenses,” he explains.

The sector’s influence is expected to remain decisive.

Jansen says the combined impact of tariff adjustments and structural constraints means the housing category will continue to play a central role in Namibia’s overall inflation trajectory over the medium term.

Housing, water, electricity, gas and other fuels inflation remained unchanged at 4.1% year on year in November, matching the October outcome and slightly below 4.3% recorded a year earlier.

On a monthly basis, the category registered 0%, reversing the sharp 1.5% tariff-driven increase recorded in October.

“The stabilisation in November reflects a normalisation in utility adjustments, although underlying structural pressures within the housing market continue to keep the category elevated,” Jansen notes.

Within the category, inflation for water supply, sewerage and refuse services slowed to 1.3% year on year, down from 4.8% in October, signalling easing following municipal tariff adjustments.

Maintenance and repair costs rose to 2.1% year on year, reflecting continued price pressures linked to construction materials and labour.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.