Approved building plans in Windhoek increase in January
A total of 162 building plans were approved by the City of Windhoek in January, representing a 78% increase from the 91 in December 2018.
The value of building plans approved increased by N$207.8 million from N$64.9 million in December to N$272.7 million in January. About 87 Buildings with a value of N$54.2 million were completed in January, versus 78 buildings worth N$16.4 million completed in December.
New residential units were the second largest contributor to the total number of building plans approved in January as 29 new units worth N$167.9 million were approved in January. It is however worth noting that one of these approvals is an N$125.0 million residential project approved for the city centre.
IJG Research noted that despite the January increase, the majority of these approvals are additions to properties which are typically of low relative value.
“Growth in commercial and industrial construction activity remains extremely subdued as the decrease (on a 12-month cumulative basis) in credit extended to corporates also reflects,” IJG stated.
With government still in a fiscal consolidation cycle and spending less on capital and infrastructure projects, IJG expects the construction sector to remain under pressure for most part of the year.
“The mid-term budget released late last year pointed to little additional public funds flowing into the sector. In fact, funds were prioritised to operational expenditure with the African Development Bank loan replacing the funding for larger infrastructure projects in 2019. Infrastructure funding from outside Namibia as well as public private partnerships are now necessary to drive the infrastructure investment that Namibia so desperately needs. We may see more efforts to attract and deploy funds from external sources in 2019 due to it being an election year, which may provide some potential for industry growth,” IJG added.