Category Archives: Building Plans

The City of Windhoek approved a total of 234 building plans worth N$133.6 million in September. In value terms approvals rose by 19.3% m/m but fell by 69.1% y/y. A total of 74 completions to the value of N$115.4 million were recorded in September, a decrease of 67.1% y/y in number but a 5.0% y/y increase in value. The year-to-date value of approved building plans reached N$1.21 billion, 22.7% lower than the comparative period a year ago. On a twelve-month cumulative basis, 2,081 building plans were approved worth approximately N$1.64 billion, 10.5% lower in value terms than approvals at the end of September 2019.

The majority of building plan approvals were made up of additions to properties. For the month of September 148 additions were approved worth N$57.8 million, 6.3% less in number and 9.6% less in value than in August. Year-to-date, 1,166 additions have been approved with a value of N$511.6 million, a 4.5% y/y decrease in number and 11.7% y/y decrease in value. 38 additions worth N$18.5 million were completed during the month. In 2020 thus far 839 additions have been completed worth N$424.2 million, an increase of 3.2% y/y in number and 7.4% y/y in value.

New residential units accounted for 85 of the total 234 approvals registered in September, worth N$74.8 million. Year-to-date 391 new residential units have been approved worth N$423.3 million, an increase of 37.2% y/y in number but a decrease of 4.2% y/y in value. 35 new residential units worth N$95.9 million were completed during the month, increases of 84.2% y/y in number and 294.1% y/y in value. Year-to-date 592 residential units have been completed at a value of N$953.2 million, increasing by 163.1% y/y in number and 194.9% y/y in value. On a 12-month cumulative basis the number and value of residential completions are at the highest levels since 2005.   

Only 1 new commercial unit, valued at N$1.0 million, was approved in September, bringing the year-to-date number of commercial and industrial approvals to 33, worth a total of N$277.0 million. On a rolling 12-month basis, the number of commercial and industrial approvals have slowed further to 45 worth N$306.4 million as at September, representing an increase of 2.3% y/y in number and a decrease of 45.0% y/y in value.

As illustrated in the figure above, the cumulative value of building plans approved continues to trend downward in both nominal and inflation adjusted terms. As approvals is a forward-looking measure of expected construction activity this does not bode well for economic activity in the capital in general. What may be positive however is the ratio of completions to lagged approvals seems to indicate a higher proportion of approved building plans actually being completed. This may partly explain why the approvals data failed to predict the below visible increase in completions. Another possible explanation is that there has been a completions backlog (paperwork backlog) which is now being processed, in which case the below graph does not tell us much about when the actual construction activity took place. We thus caution reading too much into the completions data and continue to look at approvals as a leading economic indicator. 

The City of Windhoek approved a total of 235 building plans in August, 10 fewer than in July. In value terms approvals fell by N$29.2 million to N$111.9 million, a 20.7% m/m and 17.4% y/y decrease. A total of 275 completions to the value of N$395.0 million were recorded in August, a rather substantial 183.5% y/y increase in number and 302.5% y/y in value. The year-to-date value of approved building plans reached N$1.08 billion, 5.0% lower than the comparative period a year ago. On a twelve-month cumulative basis, 2,049 building plans were approved worth approximately N$1.94 billion, 25.3% higher in value terms than approvals at the end of August 2019.

The majority of building plan approvals were made up of additions to properties. For the month of August 158 additions were approved worth N$64.0 million, 6.6% more in value terms than in July, although the number of additions approved fell by 7.6%% m/m. Year-to-date, 1,018 additions have been approved with a value of N$453.7 million, a 9.6% y/y decline in value terms. 118 additions worth N$28.7 million were completed during the month.

New residential units accounted for 76 of the total 235 approvals registered in August, 5 more than the 71 residential units approved in July. In monetary terms, N$33.0 million worth of residential units were approved in August, representing a 22.5% m/m and 54.4% y/y decrease. 306 New residential units have been approved thus far in 2020, 22.4% more than during the corresponding period in 2019. The year-to-date value of residential approvals reached N$348.5 million, 12.5% lower than during the same period in 2019. 156 new residential units worth N$353.8 million were completed during the month.

Only 1 new commercial unit, valued at N$15.0 million, was approved in August, bringing the year-to-date number of commercial and industrial approvals to 32, worth a total of N$276.0 million. On a rolling 12-month basis, the number of commercial and industrial approvals have slowed to 51 worth N$616.5 million as at August, representing an increase of 18.6% y/y in number terms and 89.9% y/y in value terms. It is important to note however that these increases are mostly attributable to base effects with a large approval in September 2019 contributing to the increases.

In the last 12 months 2,049 building plans have been approved, increasing by 5.8% y/y. These approvals were worth a combined N$1.94 billion, an increase in value of 25.3% y/y. While this sounds like a strong recovery, the increase is mostly as a result of base effects as a result of very little building activity in 2019. As the graph above shows, on an inflation-adjusted basis, the 12-month cumulative value of approvals is still going down steadily and currently trends at levels last seen in 2010.

The completions data also paints a particularly positive picture when judged at face value. Delving a bit deeper into the numbers however shows that 140 of the 275 completed buildings in August were at Omeya. In our opinion it is unlikely that such a high number of buildings were completed in the month, and could simply be due to the City of Windhoek catching up on its backlog.

Going forward we expect lower value additions to properties to continue making up the majority of approvals.

A total of 245 building plans were approved by the City of Windhoek in July, 25 fewer than in June. In monetary terms, approvals decreased by N$32.6 million to N$141.1 million, an 18.8% m/m decline from June. The number of completions for the month of July stood at 253, valued at N$328.2 million. Year-to-date, N$966.3 million worth of building plans have been approved. On a twelve-month cumulative basis, 2,007 building plans were approved worth approximately N$1.96 billion, 6.9% higher in value terms than cumulative approvals as at July 2019.

The largest number of building plan approvals in July were made up of additions to properties. 171 additions to properties were approved with a value of N$60.0 million, 17.7% less in value terms than in July 2019. We continue to see more additions to properties being approved but with a lower overall value being added. Year-to-date 860 additions to properties have been approved with a value of N$389.8 million, a 10.4% y/y decline in value terms. 51 additions worth N$24.6 million were completed during the month.

New residential units accounted for 71 of the total 245 approvals registered in July, 5 fewer than the 76 residential units approved in June. In value terms, N$72.3 million worth of residential units were approved in July, which is in line with the value of residential approvals in June. Year-to-date 230 residential units have been approved, 14 more than during the corresponding period in 2019. In monetary terms, N$315.6 million worth of new residential plans have been approved year-to-date, a decrease of 11.3% when compared to the corresponding period last year. This indicates that while more residential units are planned to be built, it will be smaller or lower valued units than approved in the same period last year. 198 new residential units worth N$291.7 million were completed during the month.

Commercial and industrial building plans approved in July amounted to 3 units, worth N$8.8 million. On a year-to-date basis, the number of commercial and industrial approvals increased by 34.8% y/y in July to 31 units, worth approximately N$261.0 million, an increase of 25.1% y/y in value terms over the period ending July 2019. 4 commercial and industrial units worth N$11.9 million were completed during July.

During the last 12 months, 2,007 building plans have been approved, decreasing by 0.3% y/y in terms of number of approvals, but increasing by 6.9% y/y in terms of value. While there has been a slight up-tick in cumulative approvals over the last 3 months, the growth was driven mainly by approvals in additions to properties and new residential units which are of lower relative value. Growth in commercial and industrial construction activity remains extremely subdued.

City of Windhoek’s data shows that the average waiting period from submission to approval for residential and commercial units was 137 days, meaning that most of the submissions were done just before the lockdown period. It thus remains to be seen how many of these approvals will result in actual building activity as both businesses and consumers are still recovering from the impact of the lockdowns and are unlikely to still be in the financial position to go ahead with these building projects. We expect construction activity to remain under pressure over the short-term.