Category Archives: Building Plans

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.

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.