House Price Index beats all SA Provinces, except for the Western Cape

Of all the major rand area regions, the Western Cape had the highest house price growth in the first quarter, followed by Namibia with 8.1%. On average, after 15 very strong years, Namibia remains the most expensive of all the major rand area regions, according to John Loos, household and property sector strategist at FNB. “Namibia has been the clear outperformer. Since 2008 Namibia has performed noticeably stronger than SA in terms of real house prices,” he said at an information session this week. He added that it is unlikely that any of the rand areas – Namibia, Botswana, Lesotho and Swaziland – can escape the current period of global economic stagnation unscathed. Some will, however, do better than others, depending on the “competitive advantage” that they have created for themselves. This in turn influences relative housing market performances.

“It is old news that Namibia’s economic growth rate has been well-above that of South Africa’s over the past decade, often exceeding the 6% growth mark. This has been supported by strong levels of fixed investment in that economy,” said Loos. “This, accompanied by a widely reported lack of newly available land for development, has translated into very strong average house price inflation in that country.”

Over the 15 year period from the first quarter of 2001 to the first quarter of 2016, Loos estimates the cumulative average house price growth in Namibia to have measured a massive 550.2%. FNB estimates the average price of what gets transacted to have been R1.587m in the first quarter of 2016. Namibia’s house price growth has, however, been slowing in recent times, as has South Africa’s as a whole. Only the Western Cape has bucked the trend. The Western Cape is the most expensive within SA’s borders, with an average estimated house transaction price of R1.353m. Over the past 15 years, its cumulative house price inflation has been estimated at 290.5%, more modest long term growth than the booming Namibia, according to Loos.

The FNB Western Cape House Price Index for the first quarter of 2016 rose 12% year-on-year. This is faster than the 10.5% recorded in the previous quarter, and is the highest price growth rate recorded since the first quarter of 2006.

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