A total of 172 building plans were approved in August, an increase of 43 from the 129 approvals in July. In value terms however, approvals fell by N$24.7 million to N$116.2 million in August from N$140.9 million worth of approvals in July. A total of 29 completions to the value of N$20.1 million were recorded in August. This was a decline in dollar terms of N$71 million compared to N$91.1 million worth of completions in July. Year to date, N$1.71 billion worth of building plans have been approved, 22% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1,851 building plans were approved worth approximately N$2.28 billion, 4.2% higher in value terms than approvals in August 2016.
Of the total 172 plans approved in August, additions to properties accounted for 148 of those approvals. Additions to properties amounted to 105 in July, with this category usually making up the majority of approvals. This is an indication that there is continuous investment by property owners in the upkeep and improvement of property. Year to date, 1,008 additions to properties have been approved to the tune of N$749.4 million, 6.2% more than in the corresponding period in 2016.
New residential units accounted for 22 of the total 172 approvals registered in August. Year to date 196 residential units have been approved, 45 more than in the corresponding period in 2016. In value terms, N$323 million worth of new residential plans have been approved year-to-date, 0.6% lower than the N$324.8 million in August 2016. On a monthly basis, new residential unit approvals increased by 37.5%, an encouraging sign given the slowdown in private sector credit extension.
Commercial and industrial building plans approved for the year to date amount to 27 units, worth N$641.8 million. This being lower than the 55 building plans approved by the end of August 2016, although higher in dollar terms than the N$322 million in the corresponding period of 2016. Two commercial building plans valued at N$13.7 million were approved in August. On a 12 month-cumulative basis, commercial and industrial property approvals rose by 25.4% in value terms in August compared to the corresponding period in 2016, with the total number of plans approved falling only by 2 units.
The 12-month cumulative number of building plans approved have been ticking up slightly since May, however falling marginally in August. In the last 12 months 1,851 building plans have been approved, 0.1% more than in August 2016. Government has reported settling all outstanding invoices, with the construction industry being a relieved recipient of those dues. However, with government still in a fiscal consolidation cycle and spending less on capital and infrastructure projects, we expect the sector to remain under pressure for the remainder of the year. Bank of Namibia (BoN) only recently cut interest rates by 25 basis points following the South African Reserve Bank’s (SARB) decision in July. The slowdown in inflation on the backdrop of subdued economic growth, has provided room to both central banks for further rate cuts, with MPC meetings scheduled for September and October respectively. Further relaxation of monetary policy in turn provides consumers with relative but very welcome relief that does flow through to their discretionary income.