Category Archives: Building Plans

A total of 202 building plans were approved by the City of Windhoek in September. This is a 4.7% increase in the number of plans approved on a monthly basis when compared to the 193 building plans approved in August. In monetary terms, the approvals were valued at N$432.2 million, an increase of N$296.7 million or 218.9% compared to last month. The number of completions for the month of September stood at 225, valued at N$110.0 million. The year-to-date value of approved building plans currently stands at N$1.57 billion, 0.7% lower than as at the end of the third quarter of 2018. On a twelve-month cumulative basis, 1,986 building plans worth approximately N$1.83 billion were approved, a decrease in number of 9.1% y/y, but a contraction of 5.6% in value terms over the prior 12-month period.

The largest portion of building plan approvals was once again made up of additions to properties, from a number perspective. 160 additions to properties were approved in September, a 3.9% increase over the number of additions approved in August. Year-to-date 1,221 additions to properties have been approved with a cumulative value of N$579.2 million, a decline of 22.6% y/y in terms of value compared to the same period in 2018. Completed additions amounted to 206, valued at N$85.6m, increasing by 171.1% y/y in number and 69.1% y/y in value. Year-to-date 813 additions have been completed to a value of N$395.0m, decreases of 55.4$ y/y in number and 36.2% y/y in value.

New residential units were the second largest contributor to the number of building plans approved with 35 approvals registered in September, compared to 34 in August. In value terms, N$43.6 million worth of residential units were approved in September, a 2.5% m/m increase. 285 New residential units valued at N$442.0m were approved in the first nine months of 2019, 28.2% y/y less in number and 3.9% y/y less in value than during the corresponding period in 2018. The year-to-date value of residential approvals reached N$442.0 million, 3.9% lower than during the corresponding period in 2018. 19 residential units valued at N$24.3m were completed in September bringing the year-to-date number to 225, up 275.0% y/y, and value to N$323.2m, up 216.2% y/y.

Commercial and industrial building plans approved in September amounted to 7 units, worth N$311.1 million. The number of approvals for commercial and industrial properties has been languishing in single digit territory since September 2016 and has an average approval rate of less than 4 approvals per month over the last 12 months. On a 12-month cumulative basis, the number of commercial and industrial approvals has decreased by 15.4% y/y in September to 44 units, worth approximately N$557.5 million, an increase of 34.5% in value terms over the prior 12-month period. It should however be noted that a single commercial building plan approved in September, a N$250.0 million project by Nedbank approved for the city centre, propped up the value approved year-to-date, saving the category from recording another contraction. No commercial and industrial building plans were recorded as completed in September.

During the last 12 months, 1,986 building plans have been approved, decreasing by 9.1% y/y. These approvals were worth a combined N$1.83 billion, a decrease in value of 5.6% y/y. The number of building plans approved, on a cumulative 12-month basis, has been contracting over the last three months. The overall decrease in both number and value of cumulative plans approved is concerning as, even in nominal terms, this indicates a continuing decrease of construction activity in the capital. Low consumer and business confidence means that growth in construction activity will likely remain subdued for the short- to medium-term.

A total of 193 building plans were approved by the City of Windhoek in August, 12 more than in July. The value of approvals increased to N$135.5 million in August as opposed to N$114.9 million in June. A total of 97 building plans were completed during the month with a value of N$98.1 million. Year-to-date, N$1.14 billion worth of building plans have been approved, 20.6% lower than the corresponding period in 2018. On a twelve-month cumulative basis, 1,937 building plans have been approved worth approximately N$1.54 billion, 19.1% lower in value terms than cumulative approvals in August 2018.

154 additions to properties were approved in August with a value of N$66.5 million, a drop of 8.9% m/m and 20.0% y/y in value terms. Year-to-date 1,061 additions to properties have been approved with a total value of N$501.7 million, a decrease of 5.9% y/y in number and 28.8% y/y in value terms. On a 12-month cumulative basis, the number of additions approved contracted by 10.3% y/y and 29.4% y/y in value terms. Year-to-date 607 additions have been completed with a combined value of N$309.3 million, down 61.8% y/y in number and 37.9% y/y in value terms.

New residential units accounted for 34 of the approvals registered in August, an increase of 9.7% m/m. In value terms, N$42.5 million worth of residential units were approved in August, increasing by 139.9% m/m but contracting by 54% y/y. Year-to-date residential unit approvals have decreased by 31.3% y/y in number and 8.5% y/y in value terms. On a 12-month cumulative basis, residential units recorded a 20.1% y/y decrease in number of approvals and a 7.4% y/y in value.

5 new commercial units, valued at N$26.5 million, were approved in August, bringing the year-to-date number of commercial and industrial approvals to 28, worth a total of N$235.1 million. Year-to-date, this is the same number of commercial approvals compared to the corresponding period in 2018, but represents a contraction of 19.1% y/y in value terms. On a rolling 12-month basis, the number of commercial and industrial approvals fell to 43 units worth N$495.1 million as at the end of August. This is a decrease of 15.7% y/y in number and 6.2% y/y in value. The drop-in figures indicate the declining level of activity in the industry.

In the last 12 months 1,937 building plans have been approved, decreasing by 12.4% compared to August 2018. These approvals amounted to N$1.54 billion, representing a decrease in value of 19.1% y/y. According to the Namibia Statistics Agency, construction industry recorded a negative sectoral growth rate of 27.8% in the first quarter of 2019 and 5.5% in the second quarter. We expect this trend to continue in the medium-term, given the current state of the economy. This continues to be of concern as the construction industry forms part of the key sectors along with mining and agriculture in the Namibian economy.

The BoN took the decision to cut interest rates by 25 bps in August and this has brought some relief to indebted consumers and businesses. However, private sector credit extension for August indicates that although there has been an increase in the uptake of credit on year-to-year basis, it has mainly been short-term and overdraft facilities. Household have taken up most (64.3%) of the credit extended compared to businesses. The outlook remains gloomy as the extension of short-term debt remains on the rise as opposed to financing for more productive loans.

The latest GDP data from the Namibia Statistics Agency indicates that key economic sectors remain under pressure and the economy is contracting by more than initial projections by the central bank.  According to the NSA, the economy has contracted by 2.6% in the second quarter of 2019 with growth in the construction sector contracting by 5.5% in real value-added terms. We expect the economy, and construction activity as a result, to remain under pressure as both consumer and business confidence remains low.

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.