Namibia: rental costs fall into detrimental territory

The nationwide weighted common lease contracted to N $ 6,686 from N $ 7,465 on the finish of March 2021, in keeping with the newest FNB Residential Lease Index, which posted an annual contraction of three.1%.

The 1-bedroom, 2-bedroom and 3-bedroom segments skilled annual lease contractions of 0.8%, 2.8% and 1%, reaching N $ 3,641, N $ 6,687 and N $ 9,636, respectively. The one phase that confirmed annual development in rental costs was the greater than 3 bed room unit which grew 0.3% to N $ 17,169.

“These traits spotlight pervasive affordability points amongst tenants and the elevated demand for multi-family rental housing to help affordability in these economically tough occasions,” stated Frans Uusiku, director of market analysis at FNB.

Uusiku stated incoming financial information for the primary quarter of 2021 displays the deteriorating state of the rental market, with GDP development recorded at -6.5% in comparison with -2.5% within the corresponding quarter of 2020.

Suffice it to say {that a} derailed financial restoration, which seems to have been extended by the third wave of COVID-19, and low vaccination charges are anticipated to maintain the rental market in a ‘coma’ attributable to demand muted. This might have far-reaching implications for the steadiness of the monetary sector, with doubtlessly hostile penalties resembling depressed property gross sales. Though we don’t imagine that we have now really reached this state but, some indicators are rising, ”Uusiku added.

For instance, actual property {and professional} actions are among the many 5 sectors which have pushed the economic system within the first quarter of 2021, reaching development of 4.6% year-on-year. That is additional supported by the appreciable development in house gross sales noticed through the interval thought of. As for the areas, Walvis Bay continues to steer the checklist when it comes to annual lease contractions with -44.4%, adopted by Oshakati (-33.9%), Swakopmund (-28.4%) , Ondangwa (-20.7%), Okahandja (-14.4%), Gobabis (-14.2%) and Windhoek (-3.5%). Conversely, rents in Tsumeb, Rundu and Ongwediva elevated by 35.8%, 31% and 20.2% respectively 12 months on 12 months.