House prices surge, sales slide
Namibia’s residential property market is showing signs of a growing affordability squeeze, with house prices accelerating while property transactions decline, highlighting the widening gap between rising property values and households’ ability to buy.
The FNB House Price Index increased by 8.9% on a 12-month moving average basis in the third quarter of 2026, up from 7.4% in the previous quarter and significantly higher than the 5.9% recorded in the corresponding period last year.
However, transaction volumes contracted by 3% over the same period, reversing the 2.8% growth recorded in the second quarter and marking a sharp slowdown from the 18.4% expansion recorded in the third quarter of 2025.
The divergence suggests that while property values continue to rise, affordability constraints are increasingly weighing on market activity.
Average house price
According to FNB Namibia’s latest House Price Index report, the national weighted average house price reached N$1.5 million in the third quarter, compared with N$1.46 million in the previous quarter and N$1.38 million a year earlier.
The bank attributed the continued price increases largely to supply-side constraints, including limited housing stock, shortages of serviced land and slow land delivery.
These pressures are supporting property values even as rising living costs and higher financing expenses make it increasingly difficult for households to enter the housing market.
The central region remained the strongest-performing residential property market, with house price growth accelerating to 11.4%, from 8.9% in the previous quarter.
Its average house price reached N$1.94 million, making it the most expensive region in the country.
The central region also accounted for 48.2% of all property transactions nationally during the quarter, up from 37.8% in the second quarter.
However, transaction activity in the region weakened, with volumes declining by 3.9% on a 12-month moving average basis.
The coastal region recorded more moderate price growth of 3.7%, down from 11.9% in the previous quarter, although this remained above the 1.2% recorded a year earlier.
Average house prices
Average house prices in the region stood at N$1.53 million.
Transaction activity was particularly subdued, with volume growth stagnating at 0%, compared with 7.4% in the second quarter.
In the northern region, house price growth recovered to 1.6%, following a 0.7% contraction in the previous quarter.
The average house price stood at N$991,000, although transaction volumes declined by 9.5%.
The southern region remained the weakest-performing market, with house prices contracting by 3.4%, although this represented an improvement from the 5.2% decline recorded in the previous quarter.
Average house prices in the region stood at N$892,000, while transaction volumes fell by 25%.
The region accounted for just 19 of the 841 property transfers recorded nationally during the quarter, representing 1.3% of total transactions.
Land constraints
The shortage of serviced land continues to emerge as a significant structural challenge for Namibia’s housing market.
Residential plot sales declined by 15.5% on a 12-month moving average basis in the third quarter, although this was a considerable improvement on the contractions of 26.7% in the second quarter and 32.3% in the corresponding period last year.
FNB said slow land servicing and the limited provision of serviced plots continued to restrict the availability of developable land.
Despite subdued plot sales, land prices increased across all four regions.
The average price per square metre rose by 8.5% in the central region, 18.2% in the coastal region and 18% in the northern region.
The southern region recorded the sharpest increase, at 53.8%, although the bank cautioned that the relatively small market makes the figure susceptible to statistical volatility.
Affordability pressures
The bank said rising inflation, partly driven by geopolitical tensions, had eroded household disposable incomes and reduced consumers’ ability to enter the housing market.
Mortgage credit growth improved to 2.8% year on year in August 2026, signalling some resilience in housing demand, but remained subdued by historical standards.
The bank also warned that higher borrowing costs could further constrain demand following the Bank of Namibia’s recent 25-basis-point repo rate increase to 7%.
Looking ahead, FNB expects housing supply shortages and limited serviced land availability to continue supporting property prices.
However, elevated financing costs, rising living expenses and affordability constraints are likely to keep transaction activity subdued.
The bank said meaningful improvements in land servicing, housing delivery and household income growth would be necessary to ease the barriers to home ownership.
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