144 building plans approved in Windhoek
35% month-on-month decline
The number of building plans approved appear to be on a steady decline.
The construction sector showed some slowed growth, with only 144 building plans having been approved in Windhoek for the month of September. “The September building statistics reveal substantial differences between Windhoek and Swakopmund, with a significant monthly decline in Windhoek's building plan approvals, contrasting with a robust increase in Swakopmund,” Simonis Storm said in its building plan report.
Windhoek's approved building plans dropped by 35.14% month-on-month (m/m), decreasing from 222 in August to 144 in September. Swakopmund, on the other hand, experienced a strong recovery, with approvals surging by 57.81% m/m from 64 to 101, the company said in its analysis.
On a year-on-year basis, both cities registered declines in approvals. Windhoek's approvals fell by 17.71%, while Swakopmund recorded a 12.17% contraction, reflecting broader market challenges in the construction sector, it added.
“The value of approved building plans in Windhoek in September saw a substantial increase, amounting to N$376 million, a significant 222% rise from N$116.8 million in August. This growth highlights increased investment activity in the city, with year-to-date approvals in Windhoek valued at N$1.6 billion. For the third quarter of 2024 alone, the value of plans approved in Windhoek reached N$720.4 million,” Simonis Storm said.
Cautiously optimistic
Despite the slow-down in construction activity, the company said it remained optimistic about the sector.
“While we remain cautious about the overall recovery of the construction sector, we are excited about the opportunities ahead. The recent 25-basis point rate cut by the Bank of Namibia is a welcome step toward creating a more favourable environment for property financing, particularly in the residential segment. Although the current challenges in both corporate and household mortgage lending suggest that deeper structural issues persist, we expect that further rate cuts are on the horizon, offering additional relief and support for the sector."
According to Simonis Storm, Windhoek has demonstrated resilience, with a notable increase in building plan approvals and completions, especially in the residential sector. “While the rise in project values has been modest, this growth reflects a cautious but optimistic approach by developers, focusing on smaller, less capital-intensive projects,” it said.
The softening of lending rates would further bolster activity in the construction sector, it noted.
“Looking ahead, we believe that continued monetary easing will support a gradual but steady recovery in building activities, particularly in Windhoek’s residential segment, where demand for property improvements remains robust," Simonis Storm said.
“While we remain cautious about the pace of recovery in the construction sector, we are encouraged by the prospect of further rate cuts providing additional relief. With lower borrowing costs, we expect moderate but sustained growth in building activity through the remainder of the year and into 2025."