Windhoek building plan approvals hit record lows

ACTIVITY in the construction sector remains depressed under the current economic climate characterised by low economic growth, relatively high inflation, and rising borrowing costs.
This is reflected in the drop in building plans the City of Windhoek approved in December last year, as well as completed buildings during the year, of which the value is the lowest since 2017.

According to IJG Research, Wind-hoek approved 110 building plans in December, representing a 42,4% month-on-month (m/m) decline from the 191 building plans approved in November.
“The approved plans were valued at N$48,6 million, down 58,3% m/m from the N$134,6 million worth of plans approved in November,” the researchers say.

IJG says in total, 2 467 buildings worth N$1,75 billion were approved in 2022, representing an increase of 0,7% year on year (y/y) in terms of the number of plans approved, but a 10,6% y/y contraction in value terms compared to 2021, and the lowest value since 2011.

A total of 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 proper-ties 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.

“Ten additions worth N$2,47 million were completed in December, notably below the 36 average monthly addi-tions 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,” IJG says.

Only 24 new residential units valued at N$23,7 million were approved in December, which is the lowest number of monthly approvals for the year.

Overall, 735 residential units worth N$704,1 million were approved in 2022, representing a 15,55% y/y decline in number terms, and a 32,2% y/y drop in value terms from the year before that.
At least 69 new residential units valued at N$36,67 million were com-pleted during December, exceeding the 41 worth N$33,62 million completed on average each month, and 493 new residential units valued at N$403,4 million were completed in 2022.

Only three new commercial and industrial units were approved in De-cember, bringing the total number of approvals in 2022 to 57.

In value terms, N$4,0 million worth of new commercial and industrial units were approved during the month, taking the total value of new commer-cial and industrial unit approvals to N$162,9 million for the year.

On average, five new commercial and industrial units valued at N$13,6 million were approved each month in 2022.

While no new commercial and industrial units were completed in December, the number of units com-pleted during 2022 adds up to 22 worth N$109,3 million, representing a 120% increase in number terms, but a 65,2% contraction in value terms compared to 2021, said the researchers.
Overall, the construction of new buildings hit an 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, the government’s expenses reserved for public construction work programmes grew in real terms by 22,9% quarter on quarter, and 11,5% y/y during the third quarter of 2022.

“Whether this increased investment in construction work by the govern-ment will continue over the near term, however, remains to be seen,” IJG says.
– email: matthew@namibian.com.

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