A total of 160 building plans were approved in October, 21 building plans less than what was approved in September. In value terms approvals decreased by 24.3% m/m, falling from N$116.88 million in September to N$88.46 million in October. A total of 88 completions to the value of N$51.96 million were registered in October. Completions increased by 33.1% m/m from 86 completions worth N$39.03 million in September. Year to date, N$1.91 billion worth of building plans have been approved, an increase of 13.2% y/y. On a twelve-month cumulative basis, 1,805 building plans have been approved worth approximately N$2.21 billion, 4.5% higher in value terms than the same measure for approvals in October 2016.
Additions to properties made up 130 approvals out of the total 160 approved plans recorded in October. Year-to-date, 1,287 additions to properties have been approved, increasing by 4.8% y/y and rising 7.5% y/y in value terms. Year-to-date total approvals are on track to exceed approvals registered during 2016 in value terms. As such, 2017 has been a better year than 2016 was, although not by much.
21 new residential units were approved in October, 6 less than the 27 approved in September. Year-to-date however, 244 residential units have been approved, 17 units more than in the corresponding period in 2016. In value terms, N$368.1 million worth of new residential units have been approved year-to-date, a 16.8% contraction compared to October 2016.
Commercial and industrial building plans approved amount to 41 units, worth N$675.3 million year-to-date. This is a decline of 43% in the number of plans approved from the 73 building plans approved in the corresponding period in 2016. This is however offset by the 54.2% increase in the value of these approvals compared to the corresponding period of 2016. One large commercial plan approved in May this year skews the value of approvals considerably. If one excludes this N$500 million plan, then the value of commercial and industrial plans approved year-to-date would be 60% below that of 2016 for the same period.
In the last 12 months 1,805 building plans have been approved, contracting by 0.8% compared to October 2016. Private sector credit extension growth slowed to 5.24% in September from 6.35% in August. Commercial banks are maintaining adequate monthly average liquidity positions and the slowdown credit extension growth is a sign of weak business and consumer confidence. Demand for debt has been low and the cost of debt risks becoming more expensive looking forward. Hopes of continued monetary policy support were dashed when the South African Reserve Bank (SARB) and Bank of Namibia (BoN) kept policy rates unchanged during September and October MPC meetings respectively. Mid-term budget reviews in both South Africa and Namibia that where characterised by expenditure overruns and widening budget deficits to be funded by ballooning government debt, have further exacerbated fears of credit ratings downgrades. This will place further pressure on consumers and business alike if it results in a rate hiking cycle. The outlook for a rebound in construction may thus be muted in the short term.