Category Archives: Building Plans

A total of 57 building plans were approved in February with a value of N$30.2 million, while 7 buildings with a value of N$27.4 million were completed. Thus far 2017 is off to a slow start, 231 plans were approved in the first two months while 48 were completed, the lowest numbers in the last seven years. The year to date value of approved building plans currently stands at N$289.7 million, 15.0% lower than the corresponding period in 2015. On a twelve-month cumulative basis, 1,694 building plans were approved worth approximately N$1.92 billion, 15.4% 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 186 additions to properties were approved with a value of N$165.7 million, 43.3% more in value terms than the corresponding period in 2016, but 49 less than the number of additions observed in the corresponding period in 2016.

New residential units were the second largest contributor to building plans approved: 37 residential units were approved year to date, seven less than the corresponding period in 2016. In dollar terms, N$82.5 million worth of residential plans were approved, 77.4% higher than the first two months of 2016.

The number of commercial units approved in 2017 amounted to 8, valued at N$41.5 million. This compares to 19 units valued at N$42.0 million approved over the same period in 2016. On average over the last 20 years, 9.3 commercial units valued at N$49.3 million were approved in the first two months of the year.

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, 28.4% less than the same measure for February 2016.

This decline is worrying as construction has been a major driver of growth in the last couple of years, and our overall GDP growth figures are likely to slow. 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 provides a substantial amount of jobs, on which many households depend.

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.