The month of May saw building plans worth about N$232 million approved in Windhoek and Swakopmund as the construction sector growth for the first time in four quarters.
According to Simonis Storm, Windhoek observed an increase in building plan approvals in May 2024 as approvals rose by 7.6% m/m and 13.1% y/y compared to May 2023. A total of 199 plans were approved, with a collective value of N$164.5 million. The majority of these approvals were concentrated in Khomasdal, Klein Windhoek, and Katutura.
“Specifically, out of the 199 approved plans, 147 were for additions to existing structures, 35 for new houses, 10 for walls, six for commercial uses, and one for a pool. In the same month, the number of completed buildings rose to 190, a significant increase from the 37 completed in May 2023.
“This rise is largely due to follow-up inspections conducted by the City of Windhoek (CoW) to assess the completion status of properties. As mentioned in our previous report, an increase in the number of completed projects in Windhoek was anticipated. It is also important to highlight that these figures exclude government properties,” says Simonis Storm.
In Swakopmund, 75 building plans valued at N$67.2 million were approved, 40 building plans valued at N$31.3 million were completed, and 66 building projects valued at N$46.6 million were submitted during the period under review.
“Of the 75 approved plans, 72 were for new residential buildings, two for new industrial buildings, and one for a new institutional building. The majority of completed projects included new residential buildings and additions, followed by new flats. Additionally, in May 2024, the Swakopmund municipality collected N$834,142.80 in application fees, N$27,776.50 in compliance fees, and N$426,893.67 in building fines,” adds Simonis Storm.
Overall, construction experienced modest growth of 3.5% y/y in the first quarter of 2024, following three consecutive quarters of decline.
This growth was significantly lower compared to the 26.8% y/y increase seen in the first quarter of 2023.
“The NSA attributed this minimal growth primarily to activities in the green hydrogen sector. The real value of government expenditure on construction declined by 31.5% y/y in the first quarter of 2024, in stark contrast to the 15.9% y/y growth recorded in the same period in 2023. The sluggish growth in the construction sector was largely due to reduced government spending, with a significant contraction observed in transport infrastructure projects, as reported by the NSA.
“Additionally, in the first quarter of 2024, the real value of approved and completed building plans recorded growth of 1.0% y/y. This was a significant improvement from the -5.5% y/y recorded in the first quarter of 2023, though it was lower than the 15.7% y/y growth recorded in the previous quarter,” says Simonis Storm.
Simonis Storm also provided insights on Lüderitz noting that the data on land applications from 2020 to May 2024 shows various trends. Applications from developers have fluctuated over the years, with a significant increase from 38 in 2021 to 74 in 2023, followed by a decline to 30 in the first five months of 2024. Similarly, applications for housing purposes have generally risen, starting at 50 in 2020 and peaking at 123 in 2023. However, there was a sharp decline to 16 applications in early 2024. This lower number of applications may indicate a slowdown or simply reflect the shorter reporting period.
“Applications for bare land in Lüderitz exhibited variability, reaching a peak of 104 in 2023 after fluctuating between 65 and 70 in previous years. By the first five months of 2024, there were 37 applications. Notably, applications for land in informal areas were recorded until 2022, after which they ceased. This cessation is attributed to the implementation of the Flexible Land Tenure System (FLTS), designed to register land rights and provide secure ownership to individuals in informal settlements.
“Before land can be surveyed and registered under the FLTS, comprehensive town planning is essential. This planning must consider various factors to ensure the effective operation of the FLTS. Consequently, the absence of informal land applications from 2022 onwards can be explained by the necessary preparations and planning required to support the system’s implementation,” says Simonis Storm.