The building activity observed in Windhoek and Swakopmund for January indicate a concerning start to the year, Simonis Storm Securities has said.
Windhoek experienced a decrease in both approved building plans and completed projects compared to the previous month and year.
Swakopmund also saw a decrease in approved building plans and a significant decline in completed projects, indicating a slowdown in construction activity.
The firm said these trends suggest a concerning outlook for the construction sector, influenced by economic uncertainty where cyclical sectors like construction and materials typically face reduced demand. Additionally, the current high-interest rate environment further dampens activity.
City of Windhoek (CoW) approved 76 buildings plans from a pool of 122 received in January, compared to 105 plans approved in December. This marks a year to year decrease of 11.6% and a month to month decrease of 27.6%. The newly approved building plans collectively hold a total value of N$53.8 million.
The firm said 31 building projects were completed during January, an increase from 23 recorded in December 2023 but a decrease from 67 projects completed in January. The total value of the 31 completed projects amounts to N$47.4 million.
During January, the highest value of approved building plans by construction type was for houses, totaling N$41.8 million, followed by additions valued at N$8.6 million. Analyzing house plans approved by area, data from the City of Windhoek (CoW) indicate that Otjomuise had the highest value of approved house plans for the month, amounting to N$18.2 million.
The high number of approved building plans in Otjomuise can largely be attributed to the recent availability of serviced erven in the extension five area. This availability has attracted numerous developers to invest in the area, leading to a surge in approved building plans, Simonis said.
Between December 18, 2023, and January 15, 2024, a total of 22 building plans were submitted to the Swakopmund Municipality, with an estimated total value of N$43.5 million. In January, 25 building plans with a combined value of N$29.8 million were approved, a decrease from the 80 plans approved in December 2023.
