Category Archives: Building Plans

A total of 101 building plans were approved by the City of Windhoek in November which represents a 60.1% m/m decrease from the 253 building plans approved in October. In value terms, approvals fell by N$114.8 million to N$41.0 million, representing a decline of 73.7% m/m and 76.1% y/y. The number of completions for the month of November stood at 180, valued at N$37.4 million. On a year-to-date basis, 2,027 plans have been approved, 220 more than over the same period last year. The year-to-date value of approved building plans currently stands at N$1.77 billion, which is 15.1% lower than during the corresponding period in 2017. On a twelve-month cumulative basis, 2,143 building plans were approved, an increase of 10.9% y/y, worth approximately N$1.87 billion, a decrease of 14.7% in value terms over the prior 12-month period.

The largest portion of building plan approvals in November were made up of additions to properties, from both a number and value perspective. 75 additions to properties were approved with a value of N$20.6 million, 82.2% less in value terms than in November 2017. Year-to-date 1,518 additions to properties have been approved with a value of N$871.3 million, declining 12.2% y/y in terms of value.

New residential units accounted for 25 of the total 101 approvals registered in November, a m/m decrease of 46.8% compared to the 47 residential units approved in October. In value terms, N$19.7 million worth of residential units were approved in November, 55.2% less than the N$44.1 million worth of residential approvals in October. Year-to-date 469 residential units have been approved, 192 more than in the corresponding period in 2017. In monetary terms, N$524 million worth of new residential plans have been approved year-to-date, an increase of 28.5% when compared to the corresponding period last year.

Only 1 new commercial unit valued at N$700,000 was approved in November, bringing the year-to-date number of approvals to 40, worth a total of N$379.2 million. On a rolling 12-month perspective the number of commercial and industrial approvals have slowed to 44 units worth N$385.2 million as at November, compared to the 49 approved units worth N$698.1 million over the corresponding period a year ago.

Building plan approvals took a sharp downturn in November, in terms of both number of approvals and value. Recent private sector credit extension data shows that growth in short-term credit such as overdrafts has been stronger than growth in long-term credit such as mortgage loans for both consumers and businesses. This is an indication that corporates are borrowing simply to stay afloat and are not borrowing to invest in expansionary projects, as is evident in the commercial building plan approval figures. Building plan approvals are a leading indicator for economic activity, which makes November’s low figures somewhat worrisome as it implies that businesses are not investing freely and that the economy is likely to remain under pressure in the short term.

A total of 253 building plans were approved by the City of Windhoek in October, which is 100 more than in September. The value of building plans approved in October was N$155.8 million, an increase of 5.8% from the N$147.3 million worth of approvals in September. A total of 216 buildings with a total value of N$88.8 million were completed during October. On a year-to-date basis, 1,926 plans have been approved, 354 more than over the same period last year. The year-to-date value of approved building plans currently stands at N$1.73 billion, which is 9.7% lower than during the corresponding period in 2017. On a twelve-month cumulative basis, 2,277 building plans were approved worth approximately N$2.01 billion, 8.6% lower in value terms than this time last year.

The largest portion of building plan approvals was once again made up of additions to properties, from both a number and value perspective. 201 additions were approved in October, a 54.6% m/m increase over September and almost matching the number of additions approved in August. Year-to-date 1,443 additions to properties have been approved with a cumulative value of N$850.7 million, a decline of 2.9% y/y in terms of value.

New residential units were the second largest contributor to building plans approved, with 47 approvals registered in October, 14 more than in September. 444 new residential units have been approved year-to-date, 200 more than during the corresponding period in 2017. In dollar terms, N$504.3 million worth of residential plans have been approved year-to-date, an increase of 37.0% when compared to the same period last year.

5 Commercial and industrial building plans were approved in October, worth N$9.4 million. This is one fewer than in the prior month, and a decrease of 88.0% m/m and 59.5% y/y in value terms. The number of new commercial units approved thus far in 2018 stands at 39 with a total value of N$378.5 million. This compares to 41 units valued at N$675.3 million approved over the same period in 2017. On a 12-month cumulative basis, the number of commercial and industrial approvals has increased by 2.1% y/y in October to 48 units, worth approximately N$400.6 million, a decrease of 44.3% in value terms over the prior 12-month period.

On a rolling 12-month basis, the number of building plan approvals have been ticking up since the end of last year. The majority of these approvals are additions to properties which are of low relative value, meaning that in value terms there is still stagnation in the amount of overall investment into the property market. Additions to properties are generally attributable to individuals and the increase in number and value of additions over the last year signals a return of some consumer confidence, although still fragile. We expect consumer confidence to lead business confidence, which, according to the building plans data, still seems to be depressed.

We suspect that Namibia is reaching the bottom of the economic downturn with a number of high frequency indicators such as PSCE pointing to a bottoming out. We expect consumer confidence to translate to business confidence as demand picks up but signs of a widespread upswing in economic activity are still missing at present and global headwinds do pose an increased threat to recovery in the Namibian economy. The outlook for Namibia remains fragile as a result, but barring any external shocks, or poor policy decisions, the country should start emerging from recession in 2019, although at a sedate pace.

A total of 153 building plans were approved by the City of Windhoek in September, decreasing by 43.1% m/m and 15.5% y/y. In value terms, approvals decreased by N$276.2 million to N$147.3 million, representing a 65.2% m/m decline, but a 26.0% y/y increase. The number of completions for the month of September stood at 240, valued at N$138.6 million. The year-to-date value of approved building plans reached N$1.6 billion, 13.8% lower than the corresponding period in 2017. On a twelve-month cumulative basis, 2,184 building plans were approved, an increase of 20.4% y/y, worth approximately N$1.94 billion, a decrease of 13.6% in value terms over the prior 12-month period.

Additions to properties made up 114 out of the total 153 approved building plans recorded in September. This is a 46.5% m/m decrease in additions from the 213 additions recorded in August. Year-to-date 1,242 additions to properties have been approved with a value of N$748.5 million, declining 9.8% y/y in terms of value.

New residential units were the second largest contributor to building plans approved, with 33 approvals registered in September, a m/m decrease of 29.8% compared to the 47 residential units approved in August. Year-to-date, 397 new residential units have been approved, 78.0% more than during the corresponding period in 2017. In value terms, N$24.7 million worth of residential units were approved in September, 73.3% less than the N$92.5 million worth of residential approvals in August. The year-to-date value of residential approvals reached N$460.2 million, 31.6% higher than during the first three quarters of 2017.

Commercial and industrial building plans approved amounted to 6 units, worth N$78.4 million for September. Year-to-date, 34 plans for commercial and industrial purposes have been approved which is two more than in the corresponding period in 2017. On a rolling 12-month perspective the number of commercial and industrial approvals have increased to 52 units worth N$414.4 million as at September, compared to the 46 approved units worth N$711.6 million over the corresponding period a year ago.

On a 12-month cumulative basis, 2,184 building plans were approved by September, an increase of 20.4% y/y. In value terms however, approvals are down 13.6% y/y over the same period. The latest private sector credit extension data showed that mortgage loans extended to corporates contracted remained flat m/m in August, but rose by 1.1% m/m for individuals.

The outlook for short to medium term growth in the construction sector remains bleak. If implemented, the proposed changes to the income tax legislation is very likely to have a negative impact on economic growth. Increasing tax rates on businesses, coupled with continued fiscal consolidation by government, means that no substantial growth in capital expenditure on expansionary projects can be expected.