Recently, the First National Bank of Namibia recorded an all-time low annual house price growth of 3.7% year-on-year. An increase of 27.4% was recorded for the volume index, this upsurge was mainly influenced by the purchase of low-income housing which has led to an increase in demand for properties in Namibia.

The fall in house prices have reached a critical level due to the global pandemic that the country is recovering from.

To motivate the investment behaviour of investors, the bank of Namibia reviewed the earlier changes in loan-to-value regulations, smaller deposits are now required to purchase investment properties which have led to a high increase in real estate demand.

The new trend is to purchase a property, and put the property on the leasing market. This attitude has changed the narrative of property ownership, people would rather rent for a short time than purchase a property. One consequence of falling house prices is an increase in the property leasing market.

The market has changed from people buying properties to leasing their properties. Investors sell properties and after the window to resell those properties have closed; the market is flooded with properties people would rather rent on a short-term basis than actually purchase the property with the hope of a further decrease in property prices.

As a result of the shift from a real estate market dominated by artificially high house prices to one where availability is almost equal to the demand for real estate, the only solution is a shift to property development and facility management.

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