Category Archives: Building Plans

A total of 129 building plans were approved in July, falling by 53 approvals from the 182 recorded in June. In dollar terms approvals fell by N$154.9 million to N$140.9 million in July from N$295.8 million approved in June. Completions showed more encouraging signs, registering 36 completions to the value of N$91.1 million in July. An increase of N$54.5 million from N$36.6 million worth of completions in June. Year to date value of approved building plans currently stands at N$1.60 billion, 41% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1,856 building plans were approved worth approximately N$2.43 billion, 17.1% higher than the preceding twelve-month period.

Of the total 129 plans approved in July, additions to properties accounted for 105 of those approvals. Additions to properties amounted to 159 in June and perennially make up the majority of approvals, a sign that property owners continue to invest in improvements and extensions to property. Year to date, 860 additions to properties were approved with a value of N$672 million, 21% more in value terms than the corresponding period in 2016.

New residential units accounted for 16 of the total 129 approvals registered in July. Year to date 174 residential units have been approved, 51 more than in the corresponding period in 2016. In dollar terms, N$297.3 million worth of residential plans were approved year-to-date, 14.8% higher than in the corresponding period in 2016. The continued increase in the volume of residential units approved is encouraging and suggests that demand and affordability is present, and consumers should feel some relief with commercial banks set to pass on the effects of the repo rate reduction towards the loans that finance these eventual acquisitions.

The number of commercial and industrial approvals thus far in 2017 amount to 25 units, valued at N$628 million. This compares to 45 units valued at N$322 million approved over the same period in 2016. Eight building plan approvals valued at N$66 million were approved in July. On a 12 month-cumulative basis, commercial and industrial property approvals have risen by 34% in value terms in July compared to the corresponding period in 2016, even though the number of plans approved fell by 23 units.

The value of building plan approvals fell by almost 20% y/y for the month of July. However, looking over a 12-month rolling basis, approvals have fared better in July than during the corresponding period in 2016. Approvals increased by 17% on a rolling 12-month basis in value terms in July 2017, N$356 million more than the N$2.08 billion recorded for July 2016.  While the value of building plans completed remains depressed on a year-on-year and 12-month cumulative basis, the corresponding measures of value for building plan approvals point toward some recovery in the construction industry going forward. These developments in building plans follow on the backdrop of a weak economy, and moderating inflation that gave room for the SARB and then Bank of Namibia to reduce their respective repo rates by 25 basis points each. As alluded to earlier, this adjustment to BoN’s policy rate will be followed by commercial banks adjusting lending rates lower. This adjustment in turn provides consumers with relatively slight, but welcome relief.

A total of 182 building plans were approved in June, this too was the same total number of building plans approved in May. Though there was no change in the number of plans approved, there has been a significant change in the value of plans approved during June, totalling N$295.8 million, in contrast to the N$655.5 million recorded in May. A total 17 buildings with a value of N$36.6 million were completed during the month. The year to date value of approved building plans currently stands at N$1.45 billion, 52% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1,848 building plans were approved worth approximately N$2.47 billion, 20.5% higher than the preceding twelve-month period.

The majority of the number of building plan approvals were made up of additions to properties. 159 plans were approved in June, up from the 143 approved in May. Year to date, 755 additions to properties were approved with a value of N$613 million, 40.3% more in value terms than the corresponding period in 2016.

New residential units approved perennially is the second largest contributor to building plans approved. 158 residential units have been approved year to date, 49 more than during the corresponding period in 2016. In dollar terms, N$282.7 million worth of residential plans were approved, 24.8% higher than in the corresponding period in 2016. The increased activity in the residential sector is quite encouraging to see, indicating that demand persists for housing from the middle-income consumer.

The number of commercial units approved in 2017 amounted to 17, valued at N$561.3 million. This compares to 36 units valued at N$295.1 million approved over the same period in 2016. Only 1 building valued at N$10 million was approved in June. Bearing in mind that we are only half way into the year, value of plans approved already exceeds the total approvals recorded for the whole of 2016. This coming off the back of 1 commercial plan approval valued at N$500 million in May, set for construction to take place in the Windhoek CBD area.

The 12-month cumulative number of building plans approved has ticked up slightly in June. It however remains low at half of the September 2013 peak. In the last twelve months 1,848 building plans were approved, 7.3% less than the same measure for June 2016.

Government has managed to source funding in the form of a N$3 billion loan from the African Development Bank (AfDB). Treasury revealed recently that it plans to pump more than N$2.5 billion into the Namibian economy in the coming months. This will be done through the settlement of outstanding invoices, with hopes of easing the financial squeeze felt in the country. Already we’ve seen improvement in commercial banks liquidity position, which should imply banks having increased levels of loanable funds to be made available to the consumer. The struggling construction sector is set to be the largest recipient of the envisaged settlements owed by government. These positive developments support the relative increase in the number of plans approved for additions and new residential approvals which continue to be the two biggest contributors of growing approvals and completions.

A total of 182 building plans were approved in May with a value of N$655.5 million, while 47 buildings with a value of N$25.1 million were completed. Although the number of plans approved remains relatively low, the value of plans approved saw a sharp increase, as N$501.2 million worth of commercial properties were approved in May. The year to date value of approved building plans currently stands at N$1.16 billion, 44.7% higher than the corresponding period in 2016. On a twelve-month cumulative basis, 1774 building plans were approved worth approximately N$2.33 billion, 13.1% higher than the preceding twelve-month period.

The majority of the number of building plan approvals were made up of additions to properties. 143 plans were approved in May. Year to date 596 additions to properties were approved with a value of N$359.2 million, 5.1% more in value terms than the corresponding period in 2016.

New residential units were the second largest contributor to building plans approved. 136 residential units were approved year to date, 46 more than the corresponding period in 2016. In dollar terms, N$250.6 million worth of residential plans were approved, 32.4% higher than the corresponding period in 2016. The increased activity in the residential sector has been quite a positive development given the current state of the Namibian construction industry.

The number of commercial units approved in 2017 amounted to 16, valued at N$551.3 million, of which 3 plans were approved in May with a combined value of N$ 501.2 million.  This compares to 33 units valued at N$271.4 million approved over the same period in 2016. The approval of these large commercial properties is also a positive development due to the large number of people employed on these seemingly large projects.

Unfortunately, the longer-term trend remains quite negative. The 12-month cumulative number of building plans approved has been steadily declining since its peak in September 2013. This figure has halved from the peak to lows last witnessed in 1991. In the last twelve months 1,774 building plans were approved, 16.7% less than the same measure for May 2016.

Although the month of May witnessed some encouraging developments such as the approval of large commercial properties along with decent number of plans in the residential sector, the construction industry is still struggling. The Construction Industries Federation (CIF) of Namibia claims that 63% of businesses have either closed, are dormant, or have scaled down operations drastically, while at least 30% of the construction workforce has already been retrenched. The CIF expects this situation to worsen if no new tenders are allotted by the end of June.

The abrupt slowdown in the construction sector has caused ripple effects in the economy. According to the CIF, “Retrenchments are being experienced across the entire supply chain. Not only the building and civil contractors, and subcontractors such as electricians, plumbers, flooring specialists, roofers, painters as well as air-condition technicians are affected. Architects, engineers, quantity surveyors as well as suppliers of building materials also needed to scale down operations, and make large-scale retrenchments. Similarly, manufacturers and suppliers of building material are also experiencing a serious downturn.”