Building materials prices expected to remain steady in 2021
Building materials prices are expected to remain steady throughout the remainder of 2021 due to weak demand amidst slow recovery, the First Capital House Building Cost Index report for March 2021 indicates.
The report, released last week, said with the exception of sand prices, prices remain flat for most building materials. Given the dismal economic outlook, demand for cement is expected to remain weak at a time when production capacity remains elevated, implying that prices will remain subdued in the medium-term.
“Land prices remain persistently high, which continues to be a limiting factor in acquiring residential properties, especially in the central and coastal parts of the country. Monetary policy remains highly accommodative, and is expected to extend current low levels of interest rates for the remainder of the year,” the report stated. Mortgage credit to businesses has also significantly declined over the past 12 months.
However, credit extended to individuals has remained resilient over the same period, suggesting that households view this period as the best opportunity to get mortgage credit and buy houses.
A comparison of the cost of building materials in six major towns showed that the cost of materials remain higher in the northern parts of the country, compared to the central and southern parts.
The bill of quantity for building materials on three-bedroom standard housing units using March 2021 prices recorded a combined average of N$245 302 in Katima Mulilo, Ondangwa and Rundu, while the same materials averaged N$253 692 in Keetmanshoop, Windhoek and Swakopmund, representing a variance of N$1 610 in the cost of building materials within these two geographical locations.
“The total cost of building materials in Keetmanshoop is N$2 069 less than the cost of identical materials in Katima Mulilo. The differences in the cost of materials by towns reflect varying prices due to supply sources that are largely unique to every town, for example sand, stones, bricks and roofing material,” it said.