Category Archives: Building Plans

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.

191 building plans were approved by the City of Windhoek in November, representing a 27.1% m/m decline from the 262 building plans approved in October. In value terms, the approvals were valued at N$134.6 million, down 38% m/m from the N$157.3 million worth of plans approved in October. Year-to-date, 2,357 building plans worth N$1.71 billion have been approved, up 0.2% y/y in number terms but falling by 7.6% y/y in value terms compared to the same period last year. On a twelve-month cumulative basis, the number of approvals fell by 0.5% y/y to 2,455 and in value terms declined by 5.2% y/y to N$1.82 billion. 84 building plans worth N$42.7 million were completed in November.

148 additions to properties were approved in November valued at N$80.9 million, 34 fewer than the 182 units worth N$84.6 million approved last month. Year-to-date, 1,592 additions to properties worth N$865.8 million were approved, representing a 5.4% y/y increase in number terms and a 20.8% y/y jump in value terms. On a 12-month cumulative basis, 1,655 additions to the value of N$902.2 million were approved in November, 60 more than over the same period last year, and a 21.9% y/y increase in value terms. A total of 36 additions worth N$16.4 million were completed in November, up from the 36 additions worth N$9.94 million completed in October.

38 New residential units were approved in November, notably down from the 67 approved in October and the monthly average of 65 for the year. In value terms, N$48.5 million worth of residential units were approved during the month, representing a 23.2% m/m drop from the N$63.18 million approved in October and 54.0% less than a year ago. Year to date, 711 residential units valued at N$680.4 million were approved, representing a 12.0% y/y decline in number terms and a 29.8% y/y contraction in value terms. November saw 743 residential units approved over the last twelve months, an 11.3% y/y decline from the 838 units approved over the same period a year ago. In value terms, N$749.4 million worth of residential units were approved over the past 12 months, representing a 24.6% y/y decrease. 42 New residential units worth N$18.63 million were completed during November, down from the 52 residential units worth N$62.92 million completed in October.

5 New commercial and industrial units valued at N$5.18 million were approved in November, down from the 13 commercial units worth N$9.55 million approved last month. Year-to-date, 54 commercial and industrial buildings valued at N$158.9 million were approved, compared to the 34 commercial buildings worth N$160.3 million over the same period last year. This represents a 58.8% y/y increase in number but a 0.9% y/y contraction in value. On a rolling 12-month perspective, 57 commercial and industrial buildings valued at N$169.9 million were approved in November, compared to the 35 buildings approved worth N$186.5 million over the corresponding period a year ago. This represents an increase of 62.9% y/y in the number of units approved but an 8.9% y/y contraction in value. 6 Commercial and industrial units worth N$7.65 million were completed in November, the highest number of commercial and industrial units since May 2019 after only 2 units worth N$2.98 million were completed last month.

November saw the 12-month cumulative value of building plans approved continue to fall in both nominal and inflation-adjusted terms, as shown in the figure above. The 12-month cumulative value of both commercial and residential units approved dropped in November with the latter contracting for the 8^th consecutive month on an annual basis.

The 12-month cumulative value of completed plans also dipped in both nominal and real terms, as displayed below. The cumulative number of building plans completed declined for the 19^th consecutive month (year-on-year) to 1,004 in November.

The demand for the construction of new buildings hit a new low in November with the year-to-date value of building plans approved as the lowest value reported over the past decade. As observed last month, 2022 is on course to close out with the lowest annual building plan approval value over the past 10 years. We do not see support for a turnaround in construction demand in the short term. Instead, lacklustre construction activity is likely due to high inflation and ever-rising borrowing costs, conditions which are unfavourable to ignite demand for construction.