Category Archives: Building Plans

A total of 181 building plans were approved by the City of Windhoek in July, 37 more than in June. The value of approvals increased to N$114.9 million in July as opposed to N$60.5 million in June. A total of 218 building plans were completed during the month with a value of N$108.3 million. Year-to-date N$1.0 billion worth of building plans have been approved, 0.7% lower than over the comparative period a year ago. On a twelve-month cumulative basis 2,013 building plans have been approved worth approximately N$1.83 billion, 14.5% higher in value terms than cumulative approvals by the end of July 2018.

147 additions to properties were approved in July with a value of N$73.0 million, increasing by 159.4% m/m but dropping by 24.6% y/y in value terms. Year-to-date 907 additions to properties have been approved with a total value of N$435.2 million, a decrease of 0.9% y/y in number and 29.9% y/y in value terms. On a 12-month cumulative basis the number of additions approved has decreased by 3.1% y/y and by 27.4% y/y in value terms.  Year-to-date 531 additions have been completed with a combined value of N$258.7 million, down 60.1% y/y in number and 37.7% y/y in value terms.

New residential units accounted for 31 of the approvals registered in July, an increase of 40.9% m/m. In value terms N$18.1 million worth of residential units were approved in July, increasing by 5.8% m/m but contracting by 84.6% y/y. Year-to-date residential unit approvals have decreased by 31.9% y/y in number but are up by 3.9% y/y in value. On a 12-month cumulative basis a 12.5% y/y decrease in number of residential unit approvals was recorded, although increasing by 16.6% y/y in value. Year-to-date 187 residential units have been completed with a combined value of N$257.7, up 289.6% y/y in number and 178.9% in value.

3 new commercial units valued at N$23.8 million were approved in July, bringing the year-to-date number of commercial and industrial approvals to 23, worth a total of N$208.6 million. This is 21.1% up in number from July last year and 386.9% up in value terms. On a rolling 12-month basis the number of commercial and industrial approvals rose to 47 units worth N$546.1 million as at July. This is an increase of 6.8% y/y in number and 386.9% y/y in value. Year-to-date 26 commercial units have been completed with a combined value of N$178.6 million, an increase of 333.3% in number and 639.1% in value terms. This is encouraging despite both figures coming off a very low base.

In the last 12 months 2,013 building plans have been approved, decreasing by 4.8% compared to July 2018. These approvals are valued at N$1.83 billion, an increase in value of 14.5% y/y. As can be seen in the figure above the cumulative value of building plans approved in Windhoek has been trending downward in both nominal terms as well as simple inflation adjusted terms. Despite various spikes in the nominal figure the average value of plans approved continues to decline. As building plan approvals is a leading indicator this does not paint a particularly rosy picture for the construction industry in the capital city in the short term. This outlook concurs with the view of the Bank of Namibia that construction activity is likely to record a fourth consecutive annual contraction in 2019.

As we expected Bank of Namibia took the decision at its MPC meeting to cut interest rates by 25 bps. The decision to cut the Repo rate will bring some relief to indebted consumers and businesses. The central bank’s decision to cut interest rates comes as the domestic economy is projected to contract by 1.7% in the current year. This aims to boost economic growth given the current low consumer and business confidence.

According to the Bank of Namibia’s Economic Outlook for July 2019, growth in the construction industry is expected to remain negative with improvements expected to occur in 2020. Activity in the construction industry is set to recover due to the increase in government’s development budget for 2019/20 and 2020/21.

A total of 144 building plans were approved by the City of Windhoek in May, 15 less than in May. N$60.5 million worth of plans were approved in June as opposed to N$81.3 million in May. A total of 220 building plans were completed during the month with a value of N$225.3 million. Year-to-date, N$885.3 million worth of building plans have been approved, 11.7% more than during the corresponding period in 2018. On a twelve-month cumulative basis, 2,108 building plans have been approved worth approximately N$1.93 billion, 26.6% higher in value terms than cumulative approvals in June 2018.

117 additions to properties were approved in June with a value of N$28.1 million, a drop of 17.5% m/m and 63.8% y/y in value. Year-to-date 760 additions to properties have been approved with a total value of N$362.3 million, decreases of 1.3% y/y in number and 30.9% y/y in value terms. On a 12-month cumulative basis the number of additions approved has decreased by 0.8% y/y as well as by 22.2% y/y in value terms. We continue to see more additions to properties being approved but with a lower overall value being added.  Year-to-date 341 additions have been completed with a combined value of N$194.9 million, down 68.3% y/y in number and 42.6% y/y in value terms.

New residential units accounted for 22 of the approvals registered in June, decreases of 47.6% m/m and 58.5% y/y. In value terms N$17.2 million worth of residential units were approved in June, contracting by 62.7% m/m and 68.0% y/y. Year-to-date residential unit approvals have decreased by 0.5% y/y in number and are up 50.2% y/y in value. On a 12-month cumulative basis residential unit approvals recorded a 50.6% y/y increase in number of approvals and a 76.9% y/y increase in value.

5 new commercial units valued at N$15.2 million were approved in June, bringing the year-to-date number of commercial and industrial approvals to 20, worth a total of N$184.9 million. This is 5.3% up in number from June last year and 331.4% up in value terms. On a rolling 12-month basis the number of commercial and industrial approvals have risen to 44 units worth N$522.3 million. This is a decrease of 15.4% y/y in number but an increase of 192.0% y/y in value.

In the last 12 months 2,108 building plans have been approved, increasing by 7.1% compared to June 2018. These approvals are valued at N$1.93 billion, an increase of 26.6% y/y. Overall the cumulative plans approved have increased in number and value terms compared to a year ago which points to positive future construction activity in the city.

Our expectation is for the Bank of Namibia to follow the SARB’s MPC decision to cut interest rates by 25 bps at next month’s MPC meeting. Consumers and businesses are thus likely to be provided with some slight relief. With the rate cut it will become more attractive for businesses to acquire the debt finance needed to expand and invest in capital projects, but only marginally.

Interest rates are unlikely to be the major barrier to capital projects going forward. The construction industry, along with lenders, have been challenged by sluggish growth in the economy and poor business confidence rather than tight monetary policy. We do not expect the decrease in interest rates to bring about a significant improvement in the approvals and completions data in the short term as business confidence is still lacking.

A total of 159 building plans were approved by the City of Windhoek in May, 11 less than in April. N$81.3 million worth of plans were approved in May as opposed to N$169.0 million in April. A total of 71 building plans were completed during the month with a value of N$142.5 million. Year-to-date, N$824.8 million worth of building plans have been approved, 26.1% more in value than during the corresponding period in 2018. On a twelve-month cumulative basis, 2,198 building plans have been approved worth approximately N$2.01 billion, 19.4% higher in value terms than cumulative approvals in May 2018.

116 additions to properties were approved in May with a value of N$34.1 million, a drop of 42.5% m/m and 54.5% y/y. Year-to-date 643 additions to properties have been approved with a total value of N$334.2 million, an increase of 8.8% y/y in number but a decrease of 25.2% y/y in value terms. On a 12-month cumulative basis the number of additions approved has increased by 4.4% y/y while declining by 29.7% y/y in value terms. We are seeing more additions to properties being approved but with a lower overall value being added.  Year-to-date 175 additions have been completed with a combined value of N$99.6 million, down 78.9% y/y in number and 60.1% y/y in value terms.

New residential units accounted for 42 of the approvals registered in May, an increase of 31.3% m/m and 13.5% y/y. In value terms, N$45.9 million worth of residential units were approved in May, up 36.0% m/m but down 7.7% y/y. Year-to-date residential unit approvals have increased by 22.6% y/y in number and 87.2% y/y in value. On a 12-month cumulative basis the rebound in residential units has been even more impressive, recording a 77.7% y/y increase in number of approvals and a 98.6% y/y increase in value. While the magnitude of the growth in number and value of approvals is largely due to base effects it is worth noting that, in value terms, one would have to go back to early 2014 to find a higher value for approvals of flats and houses, not adjusting for inflation. As building plan approvals are a leading indicator it points to increasing construction activity going forward, albeit in the residential space.

Only 1 new commercial unit, valued at N$1.3 million, was approved in May, bringing the year-to-date number of commercial and industrial approvals to 15, worth a total of N$169.7 million. This is 11.8% down in number from May last year, but 373.3% up in value terms. On a rolling 12-month basis the number of commercial and industrial approvals have slowed to 41 units worth N$514.1 million as at May. This is a decrease of 19.6% y/y in number but an increase of 182.7% y/y in value. Unlike the strong performance seen in residential approvals, the performance in value terms over last year in the commercial and industrial space is attributable to base effects. In nominal terms the value of commercial and industrial approvals is still less on a rolling 12-month basis than in any year after 2011. The value of industrial and commercial developments is thus also picking up when compared to last May last year.

In the last 12 months 2,198 building plans worth N$2.01 billion have been approved, increasing by 14.7% y/y in terms of number of approvals and 19.4% y/y in terms of value. The total value of plans approved is 22.9% down from the peak in March 2013, as seen in the above figure. Should we adjust this figure for inflation we see that the value of plans approved is down over 42% from the peak in April 2013. Thus, while cumulative approvals have been increasing in number and value terms when compared to a year ago, construction activity in the Windhoek municipal area is very much subdued by historical standards.