An analysis of approved building plans for July 2024 in the City of Windhoek shows that Khomasdal is the most active area, with 23 approved plans primarily for additions and walls. This is followed by Katutura and Goreangab, each with 16 approved plans, predominantly for new houses, suggesting a focus on expanding residential infrastructure.
According to Simonis Storm Otjomuise follows with 14 plans.
“In Pionierspark, there are 11 approved plans, which include two swimming pools alongside other construction projects. Klein Windhoek and Wanaheda have 9 and 8 approved plans respectively, reflecting moderate development. Academia and Olympia each have 7 approved plans, indicating a steady level of activity. Hochlandpark and Rocky Crest, with 4 approved plans each, show lower but still significant construction efforts,” notes Simonis Storm.
Erospark, Okuryangava, and Prosperita each have 3 approved plans, demonstrating ongoing but minimal development. Brakwater and Cimbebasia have the least activity, with 1 and 3 approved plans, respectively. Notably, all areas, except Auasblick, are seeing additions to existing buildings, while Auasblick specifically has one new commercial building.
The outlook for the construction sector indicates modest growth with gradual building activity observed in both Windhoek and Swakopmund. In Windhoek, the city received 233 plans valued at N$227.5 million in July 2024, a slight increase from the 195 plans received in July 2023. However, the number of approved plans decreased to 189, down from 209 during the same period last year. Completed projects however saw a significant increase, with 138 projects valued at N$115.1 million completed in July 2024, compared to only 48 completed in July 2023 at a value of N$51.3 million.
Similarly, Swakopmund experienced a downturn, with only 39 plans submitted to the municipality in July 2024, valued at N$50.1 million. This marks a sharp decrease from the 66 plans submitted in July 2023, which were valued at N$64.7 million. The number of completed projects also fell, with 30 projects valued at N$29.2 million completed in July 2024, down from the previous year’s figures.
“Additionally, mortgage credit growth remains sluggish, with a modest increase to 0.6% y/y in June 2024 from 0.3% y/y in May 2024. The demand for mortgage credit is still muted, largely due to persistently high interest rates. Despite the Bank of Namibia’s earlier-than-expected interest rate cuts, the immediate impact on credit uptake by households and businesses is likely to be limited. While these cuts have the potential to boost confidence and stimulate economic activity over time, their effects may not be felt immediately.”
Current homeowners and building owners are witnessing a moderation in cost increases as inflation rates for both services and products related to maintenance and repair continue to fluctuate (Figure 3). In July 2024, inflation in these subsectors slowed, with products for maintenance and repair registering an annual inflation rate of 2.7% y/y, down from 4.7% y/y in June, though still higher than the 1.5% y/y recorded in July 2023. Conversely, services for the maintenance and repair of buildings experienced a deflationary trend, with a rate of -0.9% y/y in July, compared to an annual inflation rate of 0.6% y/y in June 2024.
The FNB House Price Index report for the first quarter of 2024 reveals a subdued housing market across Namibia, characterized by modest price growth and declining transaction volumes. Nationally, house prices recorded a 0.3% growth in 1Q2024, a significant slowdown compared to previous quarters. Land sales also experienced a sharp decline, contracting by 21.5% y/y, with the central and northern regions being the most affected. Despite some government interventions, high interest rates and affordability issues continue to suppress buying activity, leading more consumers to opt for renting. Consequently, the residential property market is expected to remain subdued due to these ongoing challenges.
“There has been an upward trend in property values across various regions over the past three decades. While house prices have generally increased in all regions, there are notable regional variations. The Central region has experienced significant and consistent growth, whereas the Coastal region also saw an increase, though with more fluctuations. The Northern region displayed a steady but slower rise in prices compared to the Central and Coastal regions. The Southern region exhibited the most volatility, with sharp fluctuations, but ultimately ended on an upward trend. However, the national average line reflects a consistent rise in house prices, emphasizing the overall growth in Namibia’s housing market,” says Simonis Storm.