…trend may reflect economic caution by property owners
August 2024 saw an increase in the number of completed building projects within the City of Windhoek, surpassing both July 2024 and August 2023, but despite this rise in construction activity, the overall value of these completed projects experienced a sharp decline.
Windhoek finalised 151 projects in total, amounting to a cumulative value of N$67 million, a considerable drop of N$48.1 million from the N$115.1 million recorded in July 2024.
“The data reveals that most of these completed projects in Windhoek were additions (100) to existing structures, emphasising a stronger focus on property enhancements and upgrades rather than new builds. This trend may reflect ongoing economic caution, as property owners prioritise extending or improving current assets rather than embarking on large-scale new developments. The remaining projects included the construction of 32 new houses, 18 boundary walls, and 1 commercial building. This composition points to a continued demand for residential upgrades and smaller-scale property developments,” Simonis Storm says.
The research experts further note that these figures suggest that development is concentrated in established residential areas, with more emphasis on improving living spaces and infrastructure rather than expansive new projects.
“This focus on smaller projects and enhancements may also align with subdued economic conditions as stakeholders await clearer signals from the broader economy, such as the expected impact of future rate cuts. Lower borrowing costs, stemming from the recent and anticipated rate reductions, could further incentivise smaller-scale investments and property upgrades. Developers and homeowners alike may be more inclined to take on such projects as the cost of financing becomes more affordable, even in a climate where larger-scale construction might still be seen as too risky,” explains Simonis Storm.
In August 2024, construction activity remained modest in both Windhoek and Swakopmund, highlighting continued development in both regions. Windhoek recorded an increase in approvals from 189 in July 2024 to 222 in August 2024, the highest on record for the year. Swakopmund also saw a rise in approvals, jumping from 39 to 64 during the same period.
From January to August 2024, Swakopmund municipality approved an average of 52 building plans per month, while Windhoek maintained a higher average of 178 approvals per month. The disparity between the two cities highlights Windhoek’s more robust urban development, though Swakopmund’s recent increase could indicate emerging growth trends in the coastal area. Year-to-date, the City of Windhoek received a total of 1,613 building plans, showing a marginal decline from the 1,633 plans recorded during the corresponding period in 2023.
In August 2024, Windhoek registered 228 building plan submissions, slightly lower than the 233 received in July 2024. Swakopmund, on the other hand, recorded 353 submissions year-to-date.
Swakopmund experienced an increase in construction activity in August 2024, with 61 building projects completed, valued at N$43.7 million. This marks a sharp increase compared to both the 30 projects finalised in July 2024 and the 23 projects completed in August 2023.
“The majority of construction activity in Swakopmund was centred around residential development, highlighting the sustained demand for housing in the region. Of the projects completed, 33 were new flats, 15 were new residential houses, and 10 involved extensions or alterations to existing properties. There was also one commercial building completed during this period. This distribution reflects a strong focus on residential growth, driven by the town’s expanding population and the ongoing need for housing.
“This pattern is consistent with broader economic trends, where housing demand tends to remain robust in coastal regions experiencing urban expansion. The emphasis on residential development suggests confidence in future growth, which could be bolstered further by expected improvements in credit conditions and potential economic stimulus through monetary easing,” said Simonis Storm.