Category Archives: Building Plans

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.”

A total of 143 building plans were approved in April with a value of N$112.9 million, while 9 buildings with a value of N$26.7 million were completed. Thus far 2017 is off to a poor start, year to date 566 plans were approved while 76 were completed, the lowest number of plans approved and completed in the last twenty years. The year to date value of approved building plans currently stands at N$505.6 million, 32.4% lower than the corresponding period in 2016. On a twelve-month cumulative basis, 1694 building plans were approved worth approximately N$1.73 billion, 27.1% less than the preceding twelve-month period.

The largest portion of building plan approvals were made up of additions to properties, from both a number and value perspective. Year to date 453 additions to properties were approved with a value of N$274.9 million, 10.6% less in value terms than the corresponding period in 2016, but also 69 less additions in absolute terms.

New residential units were the second largest contributor to building plans approved: 100 residential units were approved year to date, 20 more than the corresponding period in 2016. In dollar terms, N$180.6 million worth of residential plans were approved, 2.0% higher than the corresponding period in 2016. It is encouraging to see that the slowdown has been less pronounced in the residential segment as there is still a lot of demand for middle and low income housing.

The number of commercial units approved in 2017 amounted to 13, valued at N$50.1 million. This compares to 31 units valued at N$263.4 million approved over the same period in 2016. On average over the last 20 years, 19.2 commercial units valued at N$157.6 million were approved in the first four months of the year, which would indicate that this is an especially slow year thus far.

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 1,694 building plans were approved, 23.8% less than the same measure for April 2016.

According to the Namibian Preliminary National accounts construction sector that recorded a decline in real value added of 29.5% for the year of 2016, which made it the largest detractor to economic growth. Between 2010 and 2015 construction took centre stage in the Namibian economy and created a substantial base off which continued growth was always going to be a challenge, but the abrupt slowdown is likely to cause ripple effects in the economy.

As a leading indicator for economic activity in the country this implies that the whole economy could remain under pressure for the foreseeable future. With government spending on infrastructure slowing and the current economic environment making it increasingly difficult for banks to extend credit, we expect further contractions in the construction sector in 2017 and possibly beyond. This is cause for concern as the sector has always been a large employer, and layoffs would have a negative effect on unemployment.