Modest growth in construction sector

Windhoek’s construction sector experienced modest growth in the first quarter of 2024, with plan approvals dominant in Khomasdal, Klein Windhoek and Katutura.

According to an analysis of building plans for May 2024 by Simonis Storm Securities, growth of 3,5% year-on-year (y/y) follows three consecutive quarters of decline and is significantly lower than the 26,8% y/y increase recorded in the first quarter of 2023.

Building plan approvals in Windhoek during May 2024 rose by 7,6% month-on-month and 13,1% y/y compared to May 2023.

According to the researchers, a total of 199 plans were approved, with a collective value of N$164,5 million. 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, excluding government projects, rose to 190. This is a significant increase from the 37 completed in May 2023. This rise is largely attributed to follow-up inspections by the City of Windhoek to assess the completion progress of properties.

At Swakopmund, 75 building plans valued at N$67,2 million were approved, with 40 plans valued at N$31,3 million completed and 66 building projects valued at N$46,6 million submitted during the period under review.

According to the researchers, 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,” noted Simonis.

Additionally, in May 2024 the Swakopmund municipality raised N$834 142,80 in application fees, N$27 776.50 in compliance fees and N$426 893.67 in building fines.

At Lüderitz, land applications from developers show various trends between 2020 to May 2024 – fluctuating 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.

According to Simonis, 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,” noted the analysts.
– email: matthew@namibian.com.na