The Bank of Namibia concluded its final Monetary Policy Committee (MPC) meeting of the year on Wednesday, delivering a much-anticipated announcement: the repo rate will hold steady at 7.75%.
In tandem, the prime rate also remains unchanged at 11.5%. This decision aligns with other major central banks, including the Federal Reserve, South African Reserve Bank, and Bank of England, all of whom have maintained their rates.
This steadiness in the repo rate is seen as a positive sign as we edge closer to 2024, fostering hope for a potential decrease in interest rates by mid-year, conditional on economic stability and settling conditions.
While a slight rate cut would have been preferable to energise the retail and real estate sectors during the busy festive season, the Bank’s decision to maintain the current rate has been welcomed, particularly in light of ongoing inflationary pressures.
This pause offers relief to numerous debt holders who have been struggling to meet repayment demands even at the prevailing rates.
In June 2023, the central bank had raised the repo rate by 50 basis points to 7.75%, marking a 400 basis points increase over 18 months. For real estate professionals, while the news of stable interest rates is encouraging, the market is expected to remain sluggish.
Current affordability levels pose challenges in finding qualified buyers under these market conditions. However, properties that are priced appropriately and marketed effectively by skilled real estate professionals can still find timely buyers.
Real estate experts advise caution, especially for first-time buyers. Being approved for a N$ 2 million bond does not necessarily mean one should invest in a property of that value. Maintaining a financial buffer is crucial in case of future rate increases. Seeking advice from property professionals regarding price ranges and budgeting is highly recommended.
As the year draws to a close, the real estate market, along with consumers, can breathe a sigh of relief and look forward to a festive season with a sense of stability and cautious optimism for the year ahead.
For enquiries Text, Call or email #yourhomegirl Justina Hamupembe
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