Water woes cripples construction boom
The City of Windhoek’s water saving targets according to Simonis Storm financial services is hampering the number of building plans approved.
On an annual basis, the number of building plans approved contracted by 50.2% in July 2016. The highest annual contraction recorded in approved building plans in three years. The water crisis continues to pose a risk to the economy with construction highly dependent on a stable water supply.
The City of Windhoek in its monthly Building Plans Statistics for July 2016 show how Windhoek’s building plans approved grew by 9.2% month to month, which is 130 projects approved in July 2016 compared to 119 buildings approved in the previous month.
The financial services firm, Simonis Storm, believes that this is also exerting pressure on the number of building plans approved and completed. The City of Windhoek increased the water saving target from 25% to 40% due to the serious water shortages faced in the central area. Adding to this, recently implemented municipal tariff hikes will put further pressure as it becomes costly to use a soon dictated amount of cubic meters.
This in turn will affect the number of buildings completed going forward. During July 2016, additions accounted for 75.4% of the number of approved building projects. This category grew by 14.0% monthly to 98 compared to 86 additions recorded in June 2016.
Building approvals for houses contracted by 26.3% month to month to 14 houses approved. Furthermore, approvals for houses also contracted by 61.1% on an annual basis. Houses in the central area of Khomas remain of major concern as the City of Windhoek’s slow delivery of serviced land continues to cause a backlog.
According to the first quarter 2016 FNB housing index, the median price for residential property in Windhoek stood at N$1.3million in the second quarter of 2016 compared to N$1.2million in the onset of 2016. Building plans approved for commercial property increased to 9 units in July 2016 compared to 3 units in the prior month.
The number of building plans completed contracted by 67.1% to 26 projects in July 2016 of which 57.7% are additions while 30.8% are houses. 15 additional projects were completed during July 2016 compared to 51 projects completed in the prior month while only 7 projects were completed in the prior year.
The number of house projects completed stood at 8 units, a 63.6% decrease from 22 units recorded in June 2016. Furthermore 2 units of commercial projects were added in July while walls declined by 66.6% to 1 unit.
Building plans received by application against those approved show that the number of building plans received grew by 30.1% year on year and 19.3% month to month to 415 units in July 2016. The number of building plans approved grew by 9.2% month to month to 130 units but contracted by 54.1% compared to the previous year.
The number of building plans approved accounts for 31.3% of total units of building plans received in the month. About 68.7% of the application were not approved.
The rate at which residents can get their building plans approved is currently slow and is illustrated by the widening gap between numbers of building plans received by application versus the number of building plans approved since the beginning of the year.