Category Archives: Building Plans

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.

A total of 269 building plans were approved by the City of Windhoek in August, decreasing by 2.5% m/m but increasing by 56.4% y/y. In value terms, however, approvals increased by N$208.8 million to N$423.5 million, a 264.4% m/m and 97.3% y/y increase. A total of 269 completions to the value of N$94.9 million were recorded in August, a 3.5% y/y increase in number and 21.7% up y/y in value. The year-to-date value of approved building plans reached N$1.43 billion, 16.5% lower than the comparative period a year ago. On a twelve-month cumulative basis, 2,212 building plans were approved worth approximately N$1.91 billion, 16.4% lower in value terms than approvals as at the end of August 2017.

The majority of the number of building plan approvals were made up of additions to properties. For the month of August, 213 additions were approved worth N$83.2 million, 14.1% less in value terms than in July, although the number of additions approved increased by 46.9% m/m and 43.9% y/y. Year-to-date, 1,128 additions have been approved, which is 120 more than in the corresponding period last year. In value terms, $704.3 million worth of additions have been approved year-to-date, a decrease of 6.0% y/y.

New residential units were the second largest contributor to building plans approved, accounting for 47 of the total 269 approvals registered in August. Year-to-date, 364 new residential units have been approved, 168 more than during the corresponding period in 2017. In monetary terms, N$435.4 million worth of residential plans have been approved year-to-date, an expansion of 34.8% when compared to the corresponding period last year.

Commercial and industrial building plans approved amounted to 9 units, worth N$247.8 million for August. The largest single commercial building plan approval of the month amounted to N$148 million. Year-to-date, 28 plans for commercial and industrial purposes have been approved which is one more than in the corresponding period in 2017. However, the year-to-date value of commercial and industrial approvals at N$290.7 million is 54.7% lower than in the corresponding period last year. This highlights the lack of commercial and industrial development in the first half of 2018.

From a 12-month cumulative perspective, 2,212 total building plans have been approved by August, an increase of 19.5% y/y. In value terms however, approvals are down 16.4% y/y over the same period. The latest private sector credit extension data showed slowing growth in credit extended to corporates and individuals in July. Mortgage loans extended to corporates contracted by 1.9% m/m in July, but rose by 1.0% m/m for individuals. Commercial banks currently enjoy a healthy monthly average liquidity position of N$4.8 billion, providing sufficient levels of loanable funds. Banks are, however, currently weary of the construction industry as the balance sheets of many of the companies are stretched. Low consumer and business confidence, coupled with an increasing likelihood of interest rate hikes over the next 24 months, means that the credit appetite of both individuals and corporates is currently low and that no significant improvement in the approvals and completions numbers are expected in the short term.