WINDHOEK recorded an increase in the value of approved building plans, signalling strong investment activity, primarily in residential property additions and new housing developments.
This growth is expected to benefit local contractors, suppliers and related industries, fostering resilience in the local economy, which has been stuck in a quagmire for a number of years.
According to an analysis by Simonis Storm Securities, while the number of approved building plans dropped by 18% month-on-month (m/m) from 181 in November to 149 in December, the total value of approved plans surged to N$167 million in December 2024, a robust 74% increase from N$96 million in November.
This contrasts with Swakopmund, where approvals declined by 1% m/m, from 68 to 67, marking the third consecutive month of decline.
Windhoek approvals for the fourth quarter of 2024 reached N$201 million, contributing to a year-to-date total of N$2.2 billion, while in Swakopmund, approved plans declined by 20.4% m/m to N$70 million in December.
“Despite this monthly decrease, the year-to-date total shows substantial growth, rising to N$2.7 billion in 2024 from N$664 million in 2023.
The total fourth quarter value of 2024 was N$213 million, up from N$191 million in the same period in 2023, reflecting increased activity earlier in the year,” says Simonis.
Residential additions were the dominant category in Windhoek, representing 72% of total approvals with 108 projects. This was followed by new housing developments at 18% (28 projects), boundary walls at 4% (seven projects) and commercial developments at 3%.
“Key locations of activity were at Khomasdal, Klein Windhoek, Otjomuise and Kleine Kuppe,” the analysts note.
At Swakopmund, residential developments accounted for 89% of approvals (60 projects), with industrial and commercial buildings contributing 3% and 7%, respectively.
Simonis says while the monthly and annual decline in Swakopmund building approvals indicates challenges, the substantial year-to-date increase in approval values suggests improved market conditions compared to 2023.
“However, the consistent monthly declines highlight potential stagnation in demand and supply dynamics within the construction sector, necessitating closer monitoring,” say the analysts.
Windhoek recorded 1 147 completed building projects valued at N$770 million, a significant increase compared to 2023, which saw 627 projects completed, representing an N$82 million rise in the total value of completions.
“However, the disproportionate growth in project volume relative to value indicates that 2024’s activity has been dominated by smaller-scale developments. While these projects have increased the overall volume, their contribution to total value remains modest compared to prior years characterised by larger-scale developments,” the analysts say.
However, building activity at Swakopmund contracted, with completed projects falling to 571 in 2024 from 662 in 2023. The total value of completions also declined significantly, dropping from N$664 million to N$404 million.
“This contraction points to reduced activity in both scale and value, likely driven by waning local demand and persistent investment challenges in the coastal region,” the analysts add.
Land prices in the coastal region surged by 60.7% year-on-year in the third quarter of 2024, with the average price per square metre reaching N$817, according to the FNB House Price Index and this remarkable growth outpaced all other regions.
The central region recorded a 31.4% increase to N$1 041 per square metre, while the northern and southern regions experienced declines of -6.6% and -40%, respectively.
– email: matthew@namibian.com.na
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