Charting a course through high interest rates

Strategies to consider for aspiring homeowners
The opportunity to build generational wealth through property investment is still very much within reach.
Jemimah Ndebele
Namibia's captivating landscapes and rich cultural heritage make it an enticing place to call home.

However, the dream of homeownership has become increasingly challenging due to soaring interest rates. But don’t lose hope just yet.

While high mortgage rates may feel like a major roadblock, the journey to building generational wealth through property investment is still very much alive. By considering alternative investment strategies, like buying land or exploring properties in more affordable towns, you can turn this challenge into an opportunity.

Prices

Diving into the latest House Price Index from FNB Namibia paints a clear picture of the current housing market.

If you’re looking for the most budget-friendly place to buy a house, Okakarara is your spot, with average house prices around N$374 000.

This is a stark contrast to Windhoek and Swakopmund, where average house prices are a steep N$1.3 million.

Other pricey areas include Oniipa at N$1.06 million and Henties Bay at N$1.1 million.

Meanwhile, the southern part of Namibia offers more affordable housing options, with average prices of N$881 000.

Slowdown

The FNB House Price Index shows 1.5% growth over the past 12 months, a drop from the previous quarter’s 3.3% growth.

This slowdown is a direct reflection of fewer home purchases, thanks to high interest rates and inflation.

With many consumers focusing on everyday expenses, significant investments like buying a home take a backseat.

While economists have pointed out that the residential property market has slowed down nationwide, high interest rates and inflation have led to increased consumer debt, which is now at 86%.

Interestingly, unsecured loans, such as credit cards, are growing faster than mortgages.

This indicates that people are borrowing more for daily expenses rather than for purchasing homes - a fact that is worrisome for the financial fate of lower-income households.

But here's the silver lining.

The opportunity to build generational wealth through property investment is still very much within reach.

If high prices in central and coastal regions are discouraging, consider more affordable areas like Okakarara. The southern regions, with their relatively lower property prices, also offer attractive options for first-time investors.

Smart investment choices

The report also reveals a 28.5% drop in the sale of residential plots compared to the previous year, with the central and northern regions experiencing the biggest declines.

The coastal region saw a moderate decline, while the south was the least affected.

This overall market slowdown underscores the need for smart investment choices.

For those starting their property investment journey, focusing on less expensive areas could be your gateway into the market and a foundation for future wealth.

Savvy

While high interest rates present significant challenges, they also highlight the importance of strategic planning and savvy investment.

By exploring more affordable regions and considering land investments, prospective homeowners and investors can still seize the opportunity to build generational wealth.

With careful planning and a strategic approach, the dream of owning property and the benefits it brings can still become a reality.

So, take a deep breath, map out your plan, and get ready to embark on a rewarding journey to home ownership.

Comments

Namibian Sun 2024-06-25

No comments have been left on this article

Please login to leave a comment

Katima Mulilo: 9° | 26° Rundu: 11° | 26° Eenhana: 13° | 28° Oshakati: 12° | 28° Ruacana: 11° | 28° Tsumeb: 12° | 24° Otjiwarongo: 8° | 22° Omaruru: 11° | 24° Windhoek: 7° | 19° Gobabis: 7° | 20° Henties Bay: 16° | 32° Wind speed: 37km/h, Wind direction: E, Low tide: 11:35, High tide: 05:37, Low Tide: 00:11, High tide: 18:10 Swakopmund: 19° | 25° Wind speed: 40km/h, Wind direction: S, Low tide: 11:33, High tide: 05:35, Low Tide: 00:09, High tide: 18:08 Walvis Bay: 21° | 31° Wind speed: 36km/h, Wind direction: SE, Low tide: 11:33, High tide: 05:34, Low Tide: 00:09, High tide: 18:07 Rehoboth: 6° | 21° Mariental: 9° | 22° Keetmanshoop: 11° | 22° Aranos: 8° | 22° Lüderitz: 21° | 32° Ariamsvlei: 11° | 24° Oranjemund: 13° | 29° Luanda: 21° | 23° Gaborone: 10° | 22° Lubumbashi: 9° | 25° Mbabane: 10° | 18° Maseru: 4° | 17° Antananarivo: 11° | 20° Lilongwe: 14° | 24° Maputo: 16° | 24° Windhoek: 7° | 19° Cape Town: 12° | 18° Durban: 16° | 22° Johannesburg: 9° | 17° Dar es Salaam: 21° | 30° Lusaka: 12° | 23° Harare: 11° | 18° Currency: GBP to NAD 23.02 | EUR to NAD 19.47 | CNY to NAD 2.51 | USD to NAD 18.24 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.3 | EGP to NAD 0.37 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.7 | ZWL to NAD 0.04 | BRL to NAD 3.35 | RUB to NAD 0.21 | INR to NAD 0.22 | USD to DZD 134.49 | USD to AOA 853.63 | USD to BWP 13.53 | USD to EGP 48.33 | USD to KES 127.98 | USD to NGN 1479.51 | USD to ZAR 18.23 | USD to ZMW 25.65 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1785.89 Up +0.14% | Casablanca Stock Exchange (CSE) MASI 13125.47 Down -0.12% | Egyptian Exchange (EGX) 30 Index 26902.4 Down -0.59% | Botswana Stock Exchange (BSE) DCI 9281.23 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 320.23/OZ DOWN -0.0046 | Copper US$ 4.38/lb DOWN -0.0093 | Zinc US$ 2 881.40/T UP 0.98% | Brent Crude Oil US$ 85.58/BBP DOWN -0.0052 | Platinum US$ 985.96/OZ DOWN -0.0104 Sport results: Weather: Katima Mulilo: 9° | 26° Rundu: 11° | 26° Eenhana: 13° | 28° Oshakati: 12° | 28° Ruacana: 11° | 28° Tsumeb: 12° | 24° Otjiwarongo: 8° | 22° Omaruru: 11° | 24° Windhoek: 7° | 19° Gobabis: 7° | 20° Henties Bay: 16° | 32° Wind speed: 37km/h, Wind direction: E, Low tide: 11:35, High tide: 05:37, Low Tide: 00:11, High tide: 18:10 Swakopmund: 19° | 25° Wind speed: 40km/h, Wind direction: S, Low tide: 11:33, High tide: 05:35, Low Tide: 00:09, High tide: 18:08 Walvis Bay: 21° | 31° Wind speed: 36km/h, Wind direction: SE, Low tide: 11:33, High tide: 05:34, Low Tide: 00:09, High tide: 18:07 Rehoboth: 6° | 21° Mariental: 9° | 22° Keetmanshoop: 11° | 22° Aranos: 8° | 22° Lüderitz: 21° | 32° Ariamsvlei: 11° | 24° Oranjemund: 13° | 29° Luanda: 21° | 23° Gaborone: 10° | 22° Lubumbashi: 9° | 25° Mbabane: 10° | 18° Maseru: 4° | 17° Antananarivo: 11° | 20° Lilongwe: 14° | 24° Maputo: 16° | 24° Windhoek: 7° | 19° Cape Town: 12° | 18° Durban: 16° | 22° Johannesburg: 9° | 17° Dar es Salaam: 21° | 30° Lusaka: 12° | 23° Harare: 11° | 18° Economic Indicators: Currency: GBP to NAD 23.02 | EUR to NAD 19.47 | CNY to NAD 2.51 | USD to NAD 18.24 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.3 | EGP to NAD 0.37 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.7 | ZWL to NAD 0.04 | BRL to NAD 3.35 | RUB to NAD 0.21 | INR to NAD 0.22 | USD to DZD 134.49 | USD to AOA 853.63 | USD to BWP 13.53 | USD to EGP 48.33 | USD to KES 127.98 | USD to NGN 1479.51 | USD to ZAR 18.23 | USD to ZMW 25.65 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1785.89 Up +0.14% | Casablanca Stock Exchange (CSE) MASI 13125.47 Down -0.12% | Egyptian Exchange (EGX) 30 Index 26902.4 Down -0.59% | Botswana Stock Exchange (BSE) DCI 9281.23 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 320.23/OZ DOWN -0.0046 | Copper US$ 4.38/lb DOWN -0.0093 | Zinc US$ 2 881.40/T UP 0.98% | Brent Crude Oil US$ 85.58/BBP DOWN -0.0052 | Platinum US$ 985.96/OZ DOWN -0.0104