Category Archives: Building Plans

The City of Windhoek approved 167 building plans in February, a 111.4% m/m increase from January’s low base of 79 approvals. In monetary terms, the approvals were valued at N$72.7 million, a 229.0% m/m increase from January’s dismal N$22.1 million. Year-to-date 246 building plans worth N$94.8 million have got the nod, a decrease in number of 37.7% y/y and down 66.7% y/y in value terms. On a twelve-month cumulative basis, 2,318 buildings worth N$1.56 billion were approved, a contraction of 7.4% in number- and 21.8% in value terms over the comparative 12-month period a year ago. 50 building plans worth N$41.6 million were completed during the month. 

Additions to properties made up the largest portion of building plan approvals in terms of both number and value of approvals. 127 additions to properties with a value of N$47.2 million were approved during the month, 5 fewer than in February 2022. While February’s additions to properties approvals data is significantly better than we saw in both January and December, it is still below the average monthly approvals we saw during 2022 in both number and value terms. On a 12-month cumulative basis, the number and value of additions to properties remain roughly in line with the levels seen during the same 12-month period a year ago. 26 Additions, worth N$12.6 million were completed during the month. 

37 New residential units valued at N$23.5 million were approved in February. Again, while this is 17 more, and nearly double the value we saw approved for this category in January, it remains significantly lower than the approvals recorded for most months during 2022. For added perspective, the monthly average approvals in 2022 was 61 residential units worth N$58.7 million. The slowdown is also evident in the 12-month cumulative figures which stands at 635 units worth N$618.0 million, a decline of 26.2% y/y in number terms and a contraction of 39.3% y/y in value terms. A total of 23 residential units worth N$27.8 million were completed during the month. 

February saw 3 new commercial and industrial units approved for the third consecutive month. In value terms, the approvals amounted to just N$1.95 million. This brings the year-to-date approvals to 6 commercial buildings worth N$2.1 million, which translates to a 14.3% y/y decrease in the number of plans approved and a 75.6% y/y decrease in value terms. On a rolling 12-month perspective, the number of commercial and industrial approvals stood at 56 worth N$156.2 million, compared to the 40 units worth N$172.7 million over the corresponding period a year ago. Only 1 commercial unit valued at N$700,000 was completed in February. 

The building plans data for February showed an improvement in planned construction activity from January, although the increase was from a very low base, and the month’s approvals were well below the average monthly approvals witnessed in 2022, as mentioned a couple of times in this report. The total value of approvals in February (at N$72.7 million) was more than three times reported in January, but still below half the monthly average recorded last year.

2023 is thus off to a particularly slow start in terms of planned construction activity in the capital. As we pointed out in last month’s report, building plan approvals is a leading indicator of economic activity in the country and the above data implies that certain sectors of the Namibian economy are still faced with hardship.

A total of 79 building plans were approved by the City of Windhoek in January, a 28.2% m/m decline from the 110 approved in December. Bar April 2020, which recorded no approvals due to the Covid-19 lockdowns, January’s total number of approvals was the lowest since February 2017. In monetary terms, the approvals were valued at N$22.09 million, the lowest since April 2000, excluding April 2020. On a twelve-month cumulative basis, 2,370 building plans worth approximately N$1.65 billion were approved, representing a decline over the prior 12-month period both in number and value terms of 5.4% y/y and 17.9% y/y, respectively. 62 building plans valued at N$34.7 million were completed during the month. 

In number terms, additions to properties made up the largest portion of approvals. The month of January saw 56 additions to properties worth N$7.6 million getting the nod. A decline of 32.5% m/m in number terms and 63.9% m/m in value terms. In comparison to January 2022, the number of additions to properties in January of this year has decreased by 43.4%, with a corresponding decrease in value of 90.0%. On a 12-month cumulative basis, the number of additions to properties has been hovering around the 1,600 mark since 2018. 19 Additions worth N$7.3 million were completed during the month. 

Only 20 new residential units valued at N$14.3 million were approved in January, which is four fewer than in December, and represents a decline of 73.0% y/y in number of units approved and a 70.0% y/y drop in value terms. To put into perspective just how low January’s new residential approvals were, in 2020, when the Covid-19 lockdowns hampered construction activity, 53 new residential units worth N$68.6 million were approved on average each month. That being said, January is not necessarily a proxy for the annual residential approval numbers, as recent historical data suggests, and we may very well still see an improvement in these numbers going forward. A total of 40 residential units worth N$24.8 million were completed during the month.

3 new commercial and industrial units, worth just N$190,000, were approved in January. This compares to the same number of plans valued at N$4.00 million in December and N$5.53 million in January 2022. On average over the last 20 years, 5 commercial units valued at N$26.7 million were approved in the first month of the year. On a rolling 12-month basis, the number of approvals for this category rose to 57 units worth N$157.5 million as at January, compared to the 39 approved units worth N$169.9 million over the corresponding period a year ago. 3 Commercial units valued at N$2.65 million were completed in January.

In terms of number of building plan approvals in the capital, 2023 is off to the slowest start since 1990, while the value of the total approvals was the lowest for the first month of the year since 2000, even before adjusting for inflation. Building plans approved is a leading indicator of economic activity in the country and the above data implies that certain sectors of the Namibian economy are still showing signs of hardship. 

Notably, the value of new walls approved during the month (which we exclude from our data) was more than five times the value of new commercial and industrial building plans approved. This shows that most businesses do not have immediate plans to expand their existing operations.

There is a possibility that construction activity may increase during the year. However, considering the overall trend of the 12-month cumulative value of approvals over the past couple of years, as illustrated in the graph above, any growth, if at all, will be from an already low base that has been on a declining trend.

The City of Windhoek approved 110 building plans in December, representing a 42.4% m/m decline from the 191 building plans approved in November. In value terms, the approvals were valued at N$48.6 million, down 58.3% m/m from the N$134.6 million worth of plans approved in November. In total, 2,467 buildings worth N$1.75 billion were approved in 2022, representing an increase of 0.7% y/y in terms of the number of plans approved but a 10.6% y/y contraction in value terms when compared to 2021, and the lowest value since 2011. 79 building plans valued at N$39.1 million were completed in December, bringing the total number of plans completed in 2022 to 1,020 valued at N$653.2 million, the lowest value since 2017.

December saw 83 additions to properties approved valued at N$20.95 million, compared to the 148 units worth N$80.91 million approved in November. In total, 1,675 additions to properties valued at N$886.7 million were approved in 2022, representing a 6.4% y/y increase in the number of plans approved and a 17.8% y/y surge in value terms when compared to 2021. 10 additions worth N$2.47 million were completed in December, notably below the 36 average monthly additions completed in 2022. Overall, 505 additions worth N$140.6 million were completed in 2022, 365 fewer and N$96.8 million less than last year and has been falling since 2018.

Overall, the construction of new buildings hit a 11-year low in 2022 with the annual value of building plans approved the lowest since 2011. While construction activity in the private sector remains weak, some recovery in activity has been observed in the government sector. According to the Bank of Namibia’s December 2022 Quarterly Bulletin, the government’s expenses reserved for public construction work programmes grew in real terms by 22.9 q/q and 11.5% y/y during Q3 of 2022. Whether this increased investment in construction work by the government will continue over the near term, however, remains to be seen.

While high construction costs continue to weigh on the depressed activity in the sector, the Namibian Statistics Agency’s Q3 PPI data shows that local prices of cement lime and plaster have dropped over the first three quarters of 2022, falling by 11.2% q/q in Q3 alone. However, the 2.6% increase in the minimum wage bill for workers in the construction sector that came into effect in December will all but ease inflationary pressures on the cost of construction over the near term.

Going forward, we see little that will stimulate construction activity in the short-term. Instead, we are of the view that demand will remain depressed under the current economic climate characterised by low economic growth, relatively high inflation, and rising borrowing costs.