Category Archives: Building Plans

A total of 116 building plans were approved in December and represents a 50.6% m/m decline from the 235 building plans approved in November. In value terms approvals decreased by over N$70 million, registering approvals worth N$100 million in December. The 2017 calendar year saw the City of Windhoek approve 1,923 building plans which is an improvement on the 1,761 approved in 2016. In value terms 2017 was a better year than 2016 as well, with cumulative approvals amounting to N$2.19 billion. In value terms 2017 approvals exceeded 2016 approvals by N$219 million, an 11.1% y/y increase. of the number of building plans completed in 2017 amounted to 532, with 86 of those plans completed in December. This is a 25.5% y/y increase from the 424 building plans completed in 2016. N$591 million was spent on completions in 2017 which is only a 0.7% increase from the N$587 million worth of completions done in 2016.

Additions to existing properties perennially make up most of the total building plan approvals and 2017 was no exception. Cumulatively 1,583 additions were rendered to properties in 2017, an 11.6% y/y improvement on the 1,418 additions in 2016. The 2017 calendar year also registered a 15.8% y/y increase in terms of value with regards to additions. N$1,071 billion was spent this year in comparison to N$925 million the previous year.

New residential units were the second largest contributor to the total building plans approved in 2017. 290 new residential units were approved in 2017, 26 units or a 9.8% y/y increase in new residential approvals. In value terms, N$422 million worth of new residential units were approved, a 25.1% increase on the previous year.

The number of commercial and industrial building plans approved in 2017 amounted to 50 units, worth N$697 million. Although there is a 36.7% decrease in the number of approvals compared to 79 recorded in 2016, it is offset by a N$215 million increase or 44.6% y/y rise in the value of commercial unit approvals that provides for some optimism. While 2017 registered better for commercial and industrial units than in 2017, this does in large have to be credited to one sizable project approved in May 2017 valued at over N$500 million. The inclusion of this building plan does provide a relatively skewed view of the strides made in 2017 and if it were to be stripped out, 2017 would rather show a contraction compared to 2016.

The 12-month cumulative number of building plans approved closed off 2017 positively with a 9.2% y/y increase. A total 1,923 building plans were approved in 2017 valued at N$ 2.2 billion. Though 2017 was an improvement on 2016, the number of approvals have been tapering off since its peak in 2013. Weaker consumer and business confidence was evident in the slowdown in private sector credit extension and various other high frequency indicators. As at November 2017, the rolling 12-month private sector credit issuance stood at N$3.8 billion with consumers taking up more than 90% and the remaining 10% issued to corporates to the value of N$468 million. This viewed in conjunction with the depressed level of new commercial and industrial units approved shows that business has not taken up capital projects that would aid in economic recovery, which is so direly needed. This was exacerbated by the tumultuous year that the construction sector faced with the slow payment if invoices, derailing many projects and leading to widespread retrenchments.

A total of 235 building plans were approved in November and represents a 46.9% m/m increase from the 160 building plans approved in October. In value terms approvals increased by more than N$80 million to N$172 million in October from N$88.46 million approved in September. Total completions fell from the 88 recorded in October to 67 for November. In value terms however, completions increased by 67.1% m/m with N$86.85 million worth of completions registered in November. Year to date, N$2.09 billion worth of building plans have been approved, an increase of 12.2% y/y. On a twelve-month cumulative basis, 1,932 building plans have been approved worth approximately N$2.19 billion, 13.6% higher in value terms than the cumulative approvals registered in November 2016.

Additions to properties made up 197 approvals out of the total 235 approved plans recorded in November. Year-to-date, 1,484 additions to properties have been approved, increasing by 12.5% y/y and rising 14.7% y/y in value terms. With 2017 drawing to a close, year-to-date total approvals, in value terms, have surpassed the N$1.97 billion approvals registered in 2016 with N$119 million. By that account 2017 has, albeit marginally, been a better year than 2016 for commercial and residential real estate.

33 new residential units were approved in November, 12 more than the 21 approved in October. Year-to-date residential approvals showed further improvement with 277 new approvals, 36 units more than in the corresponding period in 2016. In value terms, N$407.9 million worth of new residential units have been approved year-to-date, a 22% contraction compared to November 2016.

Commercial and industrial building plans approved amount to 5 units, worth N$16 million for November. This is a month-on-month decline of 44.4% in the number of plans approved and a 31% decline in value terms as well.  Year-to-date 46 plans for commercial and industrial purposes have been approved, a far cry from the 76 building plans approved in the corresponding period in 2016. However, in value terms, 2017 is on course to exceed the N$482.3 million registered in 2016, with year-to-date value of commercial and industrial plans approved already at N$691.3 million. Reason for this being one large commercial plan approved in May this year that has buoyed the value of approvals considerably for 2017. This approval alone accounts for 72% of commercial and industrial building plans approved this year. Stripping out this single commercial property development would result in a contraction compared to 2016.

From a 12-month cumulative perspective, 1,932 building plans have been approved in November, increasing by 13% compared to corresponding period in 2016. Additions to properties exceeded new developments by more than four times. While private sector credit continuously slowed since the start of 2017, currently at 5.2% in October. Total mortgage loans extended to the private sector grew at an average of 8.2% during 2017. This is slower than the growth in mortgage loans of 11.7% recorded in 2016. Consumers and businesses will now look to 2018 in hopes of some relief, however recent downgrades and the potential of further downgrades in South Africa point to greater possibilities of a rate hiking cycle, which would put further pressure on consumers and will further delay a much needed economic recovery.

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.