Category Archives: Building Plans

A total of 174 building plans were approved in January with a value of N$259.5 million, while 30 buildings with a value of N$7.85 million were completed. Thus far 2017 is off to a better start than 2016, where only 116 plans were approved in the first month and 25 were completed. The value of the approved buildings is nearly double the value witnessed in January 2016. However, on a twelve month, cumulative basis, 1819 building were approved worth approximately N$2.1 billion, 5.7% 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. For the month of January 143 additions to properties were approved with a value of N$ 156.5 million, 148.3% more in value terms than in January 2016, and 48 more than the number of additions observed in the first month of 2016.

New residential units were the second largest contributor to building plans approved: 25 residential units were approved, 10 more than January 2016. In dollar terms, N$62.2 million worth of residential plans were approved, 162.2%% higher than the previous January.

The number of commercial units approved in January only amounted to 6, valued at N$40.8 million. This compares to 6 units valued at N$42.0 million approved in January 2016. On average over the last 20 years, 4 commercial units valued at N$13.5 million were approved in the first month of the year.

The 12-month cumulative number of building plans approved has ticked up slightly for the last two months. However, in the last year 1819 building plans were approved, 24.1% less than the same measure for January 2016. This figure has nearly halved from the peak in September 2013 to the current lows.

The construction industry has been a major driver of growth in the Namibian economy in the past. Private and public sector investment in infrastructure was complemented by the construction of three large mines. 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.

As a leading indicator for economic activity in the country this implies that the whole economy could remain under severe pressure. With government spending on infrastructure slowing and the current interest rate 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 provides a substantial amount of jobs and those employed in the sector earn low wages on average while supporting large families in many cases.

A total of 131 building plans were approved in December with a value of N$108.2 million. For the 2016 calendar year the City of Windhoek approved 1,872 building plans, well below the 2,467 plans approved in 2015. Cumulatively 2016 witnessed the approval of N$1.95 billion worth of plans, also well below the 2015 figure of N$2.20 billion.

The largest portion of building plan approvals were made up of additions to properties, from both a number and value perspective. Cumulatively 1,452 additions to properties have been approved with a value of N$ 926.8 million, 15.2% less in value terms compared to 2015 and 497 less than the number of additions observed in the previous calendar year.

New residential units were the second largest contributor to building plans approved. 286 residential units were approved in 2016, 96 less than 2015 when 382 units were approved. In dollar terms, N$553.3 million worth of residential plans were approved, 18.6% higher than the previous calendar year.

The number of commercial units approved in 2016 amounted to 84, valued at N$460.0 million. This compares to 136 units valued at N$636.9 million for the calendar year of 2015. On average over the last 10 years, 81 commercial units valued at N$496.6 million were approved annually.

The 12-month cumulative number of building plans approved ticked up slightly at the end of 2016. On a 12-month cumulative basis, 1,872 building plans were approved, 24.1% less than the same measure for December 2015. This figure has nearly halved from the peak in September 2013 to lows last seen in 1997. As a leading indicator for economic activity in the country this reinforces our view that we will see negative economic growth for the 2016 reporting period.

A lack of serviceable land has often been cited as the reason for the slowdown in building plans. The Municipality has indicated that there is a high demand for land, but little land left around Windhoek that can be developed. As a result, additions to existing property have exceeded new construction fourfold. However, the slowdown in additions point to less potential value in additions or possibly saturation of the available space.

At the beginning of 2016, the outlook for construction was relatively positive due to several large government projects expected to commence within the year. We revised this view several times during 2016, and our suspicions were confirmed at the most recent midterm budget. Government has cut both the development and operational budgets quite aggressively. Spending on construction was cut by a material N$1.5 billion in this financial year alone and a moratorium has been placed on all government construction projects going forward. This should have a negative effect on economic activity in general, but the construction sector in particular. Thus, we continue to forecast a contraction in the construction industry for 2017.

Building Plans – October 2016

A total of 191 building plans were approved in October with a value of N$138.6 million. On a year-to-date basis, the City of Windhoek has approved 1,550 building plans, way below the 2,176 plans approved over the same period in 2015. The year to date value of building plans approved is currently N$1.70 billion, below the year to date figure of N$1.79 seen in October 2015.

The largest portion of building plans passes were made up of additions to properties, from both a number and value perspective. Cumulatively 1,228 additions to properties have been approved with a value of N$ 815.3 million, a 4.1% increase in value from the corresponding period in 2015.however, the number of additions decreases by 479 approved plans.

Year to date 227 residential units were approved, this is 125 less than the 2015 figure of 352 and 136 less than the ten-year average of 363.  In dollar terms, N$442.7 million worth of residential plans were approved year to date, in line with the N$422.2 million over the same period in 2015 and the N$405 million average figure over the last ten years.

The number of commercial units approved in 2016 so far amounted to 73, valued at N$438.0 million. This compares to 108 units, valued at N$449.2 million over the same period last year. On average over the last 10 years, 64 commercial units, valued at N$392.8 million were approved year to date.

The 12-month cumulative value of building plans approved declined slightly in October.  The cumulative value of plans approved in October was N$2.10 billion, 2.9% lower than the value approved over the same period last year.

The 12-month cumulative number of building plans approved continued its trend of decline. On a 12-month cumulative basis, 1,841 building plans were approved in October, 27.6% less than the same measure for October last year. This figure has nearly halved from the peak in September 2013 to a low last seen in 1997. As a leading indicator for economic activity in the country this reinforces our view that we will see economic growth slow in 2016 and possibly beyond.

The slowdown in the number of building plans approved has been largely driven by a lack of serviceable land in Windhoek. The Municipality has indicated that, there is a high demand for land, but little land left around Windhoek that can be developed. It follows that this bottleneck in the availability of serviceable land has been a factor in the high number of additions relative to new developments. People have little choice but to make better use of the available space they already have. However, the fact that the number of additions is slowing points to less potential value in additions or possibly saturation of the available space.

At the beginning of the year, we believed that some growth could be expected in the construction sector. This was largely owing to several large government projects expected to commence within the year. We have revised this view earlier this year, and our suspicions were confirmed at the most recent midterm budget. Government has cut both the development and operational budgets quite aggressively. Spending on construction was cut by an immense N$1.5 billion for the remainander of this financial year and a moratorium has been placed on all government construction projects going forward. This should have a negative effect on economic activity in general, but the construction sector in particular. Thus, we forecast a contraction in the construction industry of 4.5% over the next year.