Africa-Press – Namibia. THE City of Windhoek approved 247 building plans during March 2022 with a combined value of N$130,2 million.
This coincidentally is equivalent to the number of plans approved during the same month in 2021, although slightly better in number than those approved in February this year.
The plans include 133 additions, two commercial, 63 for houses, 15 for walls and two for pools.
Despite the multimillion-dollar value attached, analysts at Simonis Storm Securities say the construction industry remains low.
“Despite the number of approved building plans exceeding its six-month average in Windhoek and at Swakopmund, we suspect that overall construction activity will be subdued in coming months as some projects are delayed due to rising building material costs,” says Simonis analyst Theo Klein.
The number of building plans being approved by municipalities generally give an indication of overall construction sector growth.
According to Klein’s analysis, much of the construction activity in Windhoek would likely be property renovations/additions, as the value of additions plans exceed new housing projects.
“A general increase in additions activity has been noted since the pandemic outbreak and it seems interest to upgrade homes still remains elevated,” he says.
Of the suburbs, Klein Windhoek topped the list in terms of value, with the value of approved plans at N$36 million, followed by central Windhoek at N$34 million, Khomasdal, Otjomuise and Kleine Kuppe were at N$9,2 million, N$9 million and N$9,1 million, respectively.
At Swakopmund, 34 building plans were approved during March 2022, compared to 72 in the previous month and 83 in March 2021.
Klein says construction activity at the coast is likely to be focused on new residential properties, with the latest statistics indicating this might be in the lower segment of the property market.
“Based on the value of approved plans and number of projects, we estimate an average N$875 000 per residential property that was approved during March 2022,” he says.
The national weighted average house price decreased from N$1 240 943 to N$1 181 225 during 2021, according to FNB Namibia.
Klein warns that if house prices continue to decline, more households could end up in a negative wealth position where the value of outstanding mortgages exceeds house valuations.
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