A total of 129 building plans were approved in July, falling by 53 approvals from the 182 recorded in June. In dollar terms approvals fell by N$154.9 million to N$140.9 million in July from N$295.8 million approved in June. Completions showed more encouraging signs, registering 36 completions to the value of N$91.1 million in July. An increase of N$54.5 million from N$36.6 million worth of completions in June. Year to date value of approved building plans currently stands at N$1.60 billion, 41% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1,856 building plans were approved worth approximately N$2.43 billion, 17.1% higher than the preceding twelve-month period.
Of the total 129 plans approved in July, additions to properties accounted for 105 of those approvals. Additions to properties amounted to 159 in June and perennially make up the majority of approvals, a sign that property owners continue to invest in improvements and extensions to property. Year to date, 860 additions to properties were approved with a value of N$672 million, 21% more in value terms than the corresponding period in 2016.
New residential units accounted for 16 of the total 129 approvals registered in July. Year to date 174 residential units have been approved, 51 more than in the corresponding period in 2016. In dollar terms, N$297.3 million worth of residential plans were approved year-to-date, 14.8% higher than in the corresponding period in 2016. The continued increase in the volume of residential units approved is encouraging and suggests that demand and affordability is present, and consumers should feel some relief with commercial banks set to pass on the effects of the repo rate reduction towards the loans that finance these eventual acquisitions.
The number of commercial and industrial approvals thus far in 2017 amount to 25 units, valued at N$628 million. This compares to 45 units valued at N$322 million approved over the same period in 2016. Eight building plan approvals valued at N$66 million were approved in July. On a 12 month-cumulative basis, commercial and industrial property approvals have risen by 34% in value terms in July compared to the corresponding period in 2016, even though the number of plans approved fell by 23 units.
The value of building plan approvals fell by almost 20% y/y for the month of July. However, looking over a 12-month rolling basis, approvals have fared better in July than during the corresponding period in 2016. Approvals increased by 17% on a rolling 12-month basis in value terms in July 2017, N$356 million more than the N$2.08 billion recorded for July 2016. While the value of building plans completed remains depressed on a year-on-year and 12-month cumulative basis, the corresponding measures of value for building plan approvals point toward some recovery in the construction industry going forward. These developments in building plans follow on the backdrop of a weak economy, and moderating inflation that gave room for the SARB and then Bank of Namibia to reduce their respective repo rates by 25 basis points each. As alluded to earlier, this adjustment to BoN’s policy rate will be followed by commercial banks adjusting lending rates lower. This adjustment in turn provides consumers with relatively slight, but welcome relief.