Category Archives: Building Plans

A total of 160 building plans were approved in October, 21 building plans less than what was approved in September. In value terms approvals decreased by 24.3% m/m, falling from N$116.88 million in September to N$88.46 million in October. A total of 88 completions to the value of N$51.96 million were registered in October. Completions increased by 33.1% m/m from 86 completions worth N$39.03 million in September. Year to date, N$1.91 billion worth of building plans have been approved, an increase of 13.2% y/y. On a twelve-month cumulative basis, 1,805 building plans have been approved worth approximately N$2.21 billion, 4.5% higher in value terms than the same measure for approvals in October 2016.

Additions to properties made up 130 approvals out of the total 160 approved plans recorded in October. Year-to-date, 1,287 additions to properties have been approved, increasing by 4.8% y/y and rising 7.5% y/y in value terms. Year-to-date total approvals are on track to exceed approvals registered during 2016 in value terms. As such, 2017 has been a better year than 2016 was, although not by much.

21 new residential units were approved in October, 6 less than the 27 approved in September. Year-to-date however, 244 residential units have been approved, 17 units more than in the corresponding period in 2016. In value terms, N$368.1 million worth of new residential units have been approved year-to-date, a 16.8% contraction compared to October 2016.

Commercial and industrial building plans approved amount to 41 units, worth N$675.3 million year-to-date. This is a decline of 43% in the number of plans approved from the 73 building plans approved in the corresponding period in 2016. This is however offset by the 54.2% increase in the value of these approvals compared to the corresponding period of 2016. One large commercial plan approved in May this year skews the value of approvals considerably. If one excludes this N$500 million plan, then the value of commercial and industrial plans approved year-to-date would be 60% below that of 2016 for the same period.

In the last 12 months 1,805 building plans have been approved, contracting by 0.8% compared to October 2016. Private sector credit extension growth slowed to 5.24% in September from 6.35% in August. Commercial banks are maintaining adequate monthly average liquidity positions and the slowdown credit extension growth is a sign of weak business and consumer confidence. Demand for debt has been low and the cost of debt risks becoming more expensive looking forward. Hopes of continued monetary policy support were dashed when the South African Reserve Bank (SARB) and Bank of Namibia (BoN) kept policy rates unchanged during September and October MPC meetings respectively. Mid-term budget reviews in both South Africa and Namibia that where characterised by expenditure overruns and widening budget deficits to be funded by ballooning government debt, have further exacerbated fears of credit ratings downgrades. This will place further pressure on consumers and business alike if it results in a rate hiking cycle. The outlook for a rebound in construction may thus be muted in the short term.

A total of 181 building plans were approved in September, 9 more than was approved in August. In value terms approvals printed flat at N$116.88 million in September, not far from the N$116.20 million in August. A total of 86 completions to the value of N$39.03 million were registered in September. This is an increase of N$19 million in compared to N$20.1 million worth of completions in August. Year to date, N$1.83 billion worth of building plans have been approved, increasing by 17.4% year on year. On a twelve-month cumulative basis, 1,814 building plans have been approved worth approximately N$2.24 billion, 1.4% higher in value terms than the same measure for approvals in September 2016.

Of the total 181 plans approved in September, additions to properties accounted for 149 of those approvals. This category usually makes up the majority of approvals and continues to do so. Year to date, 1,157 additions to properties have been approved to the tune of N$829.4 million, 8.5% higher than in the corresponding period in 2016.

27 new residential units were approved in September. Year to date, 223 residential units have been approved, 32 units more than in the corresponding period in 2016. In value terms, N$349.6 million worth of new residential units have been approved year-to-date, a 6.20% contraction compared to the N$372.7 million in September 2016. On a monthly basis, new residential unit approvals increased by 22.7%.

Commercial and industrial building plans approved year to date amount to 32 units, worth N$652 million. This is a significant contraction from the 65 building plans approved by September 2016. This is however offset by the 54.2% increase in the value of these approvals compared to the corresponding period of 2016. 5 commercial and industrial building plans valued at N$10.20 million were approved in September. On a 12 month-cumulative basis, commercial and industrial property approvals rose by 16.6% in value terms in September despite the number of approvals contracting by 50.5%. This points to larger projects being undertaken compared to the base period in 2016, an indication of improving business confidence.

In the last 12 months 1,814 building plans have been approved, contracting by 2.5% compared to September 2016. The latest private sector credit extension data showed slowing growth in credit extended to corporates and individuals in August. Mortgage loans extended to individuals contracted by 0.9% m/m in August, but rose by 4.6% m/m for corporates. Commercial banks currently carry a healthy monthly average liquidity position of N$3.5 billion, providing sufficient levels of loanable funds. Consumers therefore seem curtailed by waning appetite for credit, or are simply not meeting affordability requirements.

However, a more positive outlook lies within the current slowdown in inflation and Bank of Namibia (BoN) leaning towards further relaxation of monetary policy in support of economic growth. Having cut interest rates by 25 bps in August, we expect BoN to keep rates unchanged at the upcoming MPC meeting in two weeks’ time as the South African Reserve Bank (SARB) left rates unchanged at its September meeting, citing long term inflation outlook as a risk to policy decisions. However, further rate cuts are expected at the last two respective MPC meetings scheduled for this year. This in turn will provide consumers with relative but very welcome relief that will flow through to discretionary incomes.

A total of 172 building plans were approved in August, an increase of 43 from the 129 approvals in July. In value terms however, approvals fell by N$24.7 million to N$116.2 million in August from N$140.9 million worth of approvals in July. A total of 29 completions to the value of N$20.1 million were recorded in August. This was a decline in dollar terms of N$71 million compared to N$91.1 million worth of completions in July. Year to date, N$1.71 billion worth of building plans have been approved, 22% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1,851 building plans were approved worth approximately N$2.28 billion, 4.2% higher in value terms than approvals in August 2016.

Of the total 172 plans approved in August, additions to properties accounted for 148 of those approvals. Additions to properties amounted to 105 in July, with this category usually making up the majority of approvals. This is an indication that there is continuous investment by property owners in the upkeep and improvement of property. Year to date, 1,008 additions to properties have been approved to the tune of N$749.4 million, 6.2% more than in the corresponding period in 2016.

New residential units accounted for 22 of the total 172 approvals registered in August. Year to date 196 residential units have been approved, 45 more than in the corresponding period in 2016. In value terms, N$323 million worth of new residential plans have been approved year-to-date, 0.6% lower than the N$324.8 million in August 2016. On a monthly basis, new residential unit approvals increased by 37.5%, an encouraging sign given the slowdown in private sector credit extension.

Commercial and industrial building plans approved for the year to date amount to 27 units, worth N$641.8 million. This being lower than the 55 building plans approved by the end of August 2016, although higher in dollar terms than the N$322 million in the corresponding period of 2016. Two commercial building plans valued at N$13.7 million were approved in August. On a 12 month-cumulative basis, commercial and industrial property approvals rose by 25.4% in value terms in August compared to the corresponding period in 2016, with the total number of plans approved falling only by 2 units.

The 12-month cumulative number of building plans approved have been ticking up slightly since May, however falling marginally in August. In the last 12 months 1,851 building plans have been approved, 0.1% more than in August 2016. Government has reported settling all outstanding invoices, with the construction industry being a relieved recipient of those dues. However, with government still in a fiscal consolidation cycle and spending less on capital and infrastructure projects, we expect the sector to remain under pressure for the remainder of the year. Bank of Namibia (BoN) only recently cut interest rates by 25 basis points following the South African Reserve Bank’s (SARB) decision in July. The slowdown in inflation on the backdrop of subdued economic growth, has provided room to both central banks for further rate cuts, with MPC meetings scheduled for September and October respectively. Further relaxation of monetary policy in turn provides consumers with relative but very welcome relief that does flow through to their discretionary income.