Completed projects for the month of October for both Windhoek and Swakopmund reached 180, making it the year’s second-highest monthly total and signifying an 89.5% y/y increase from the same month last year, a latest building statistics report released by Simonis Storm reveals.
Subsequently, in October 2023, Windhoek and Swakopmund combined saw 268 building plans approved, valued at N$333.2 million. This represents a 7.6% m/m decrease and a 19.0% y/y decline in approvals.
“In October 2023, the City of Windhoek approved 197 building plans, an increase of 22 from September, marking a monthly growth rate of 12.6% m/m. Yet, this was a 29.6% y/y decrease compared to October 2022. The total value of these approvals was N$303.5 million, down from N$400.7 million in September 2023,” Simonis Storm said.
A breakdown of the 197 approved plans for October 2023 reveals that 152 plans pertain to additions, five are commercial building plans, 22 are designated for new residential properties, 17 are for walls, and one is allocated for a pool.
For the YTD period, spanning January to October 2023, a total of 1,804 building plans received approval, collectively valued at N$1.6 billion. In contrast to the corresponding timeframe in the previous year (January 2022 to October 2022), there has been a discernible reduction in the number of approved plans, decreasing from 2,306 plans with a total value of N$2.0 billion.
Completed building projects in the City of Windhoek (CoW) rose to 56 in October 2023 from 49 in the previous month, marking the fourth-highest count for the year. The total value of these projects reached N$43.5 million. Additionally, the CoW received 171 project submissions in October 2023, the lowest since January 2023, indicating a potential slowdown in new project initiations.
On the other hand, the Swakopmund municipality granted approval for 71 building plans, signifying a notable decrease from the 115 approvals reported in September 2023, reflecting a substantial contraction of 38.3% m/m.
“However, in a year-over-year comparison, there was an increase from the 51 approvals recorded in the corresponding period, demonstrating a growth of 39.2% y/y. The approved building plans in October 2023 achieved a combined value of N$29.7 million. This total comprises 69 new residential plans valued at N$29.01 million, one institutional plan at N$247.1 thousand, and one commercial building plan at N$333.9 thousand,” explained Simonis Storm.
Conversely, a total of 124 completed projects/buildings were reported in October 2023, marking the second-highest count above 100 for the year, following the 143 recorded in July 2023. The total value of these completed projects amounted to N$32.8 million. The Swakopmund Municipality also disclosed the following building fees, including N$86,830.81 in building application fees, N$28,180.00 in building compliance fees, and N$52,974.97 in building fines issued.
Bank Of Namibia (BoN) has recently implemented changes to the loan-to-value (LTV) ratio regulations, effective as of 31 October 2023. Notably, second-time home buyers now enjoy a reprieve from the obligation to pay deposits. According to BoN spokesperson Kazembire Zemburuka, “A mortgage loan for a second residential property no longer requires any deposit, while mortgage loans for third and subsequent residential properties only require a 10% deposit.”
Reacting to this, Simonis Storm highlighted that this adjustment is welcomed as a significant boon to the construction sector, addressing a key impediment for second-time home buyers and contributing to the provision of much-needed housing for Namibians.
Moreover, it is anticipated to attract investments in the housing sector, fostering a positive impact on the property market and potentially stimulating increased demand.
“Despite the positive outlook, it is prudent to exercise caution. The relaxation of these ratios may indeed spur further demand in the sector, adding momentum to an already recovering market. However, a noteworthy consideration is the potential consequence of increased demand on property prices. It should be acknowledged that while these changes aim to facilitate access to housing, the affordability challenge persists, particularly given the prevailing relatively high interest rates.
“Consequently, the immediate impact of this relaxation on affordability may be limited. As stakeholders navigate these developments, a balanced approach is crucial to sustain positive momentum while mitigating potential challenges associated with heightened demand and affordability constraints,” further said Simonis Storm.