Africa-Press – Namibia. THE City of Windhoek approved 105 new building plans out of the 200 received during December 2021, with a total value of N$122 million.
This is a double digit drop (19,2%) compared to 130 new building plans in December 2020, according to a Simonis Storm analysis report.
On completed projects, there was, however, an upside.
“During 2021, council approved 2 682 plans compared to 2 524 in 2020, a rise of 6,3% and 67 building projects were completed in December 2021, compared to 52 in December 2020, giving a rise of 28,8% y/y,” said the report.
The 67 projects had a value of N$317,3 million, with commercial projects valued at N$275 million, housing at N$38,7 million, and additions at N$3,6 million, Simonis added.
“During 2021, a total of 1 729 building projects were completed, compared to 1 720 in 2020, realising a slight edge upwards of 0,5%.
“The value of approved plans in Windhoek in December 2021 was mixed across high-income and middle- to low-income neighbourhoods,” said the report.
Meanwhile, at Swakopmund, 96 building plans with a value of N$55,8 million were approved during December 2021, compared to 54 plans with a value of N$34,4 million that were approved during December 2020, giving a 77,8% increase y/y.
According to statistics released by the Swakopmund municipality, during 2021, 690 plans were approved compared to 500 in 2020, realising an increase of 38%.
During December, 45 building projects valued at N$42,7 million were completed, compared to 28 projects with a value of N$16,3 million that were completed in December 2020.
“These projects included 18 new residential projects (N$10,8 million), seven residential additions and alterations worth N$2,8 million and three new flats valued at N$2,7 million,” the report added.
Last year, 442 building projects were completed compared to 392 in 2020, realising a 12,8% increase.
Using the building statistics from Windhoek and Swakopmund as a proxy for the construction sector in Namibia, Simonis does not believe 2021 gross domestic product figures could have significantly improved from 2020 levels.
Annual mortgage growth has been far below long run averages, with household mortgages growing at a net 6% on average and corporates growing at a net 1% on average in the last three years compared to a net 13% and 26%, respectively, between 2005 and 2017.
Interest rates are expected to increase by 125 basis points in 2022. This will increase the prime rate from 7,50% to 8,75%. The rising interest rate environment will add further pressure on mortgage loan growth in 2022, especially for households who still have salary cuts or who face low job security.
“We also expect a continued declining trend in mortgage loan growth among corporates, as certain companies capitalise on remote working and demand less office space.
“In our Economic Outlook 2022 report, 55% of respondents in our survey said they will implement a hybrid working arrangement, and 6% said they will continue with a remote working arrangement. All this could weigh on the construction sector in 2022,” said Simonis.
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