Additions continue to account for the majority of new building plans being approved, with a total of 188 building plans worth N$107.6 million having been approved during April 2022, compared to 247 in the prior month.
“Home additions or improvements might have resulted from certain households creating home offices or upgrading their homes due to being more home bound. In the last two years, Klein Windhoek (monthly average of N$8.1 million), Khomasdal (N$5.5 million), Pioneerspark (N$3.9 million), Kleine Kuppe (N$3.1 million) and Otjomuise (N$2.9 million) recorded the highest average value in home additions per month,” Simonis Storm Economist Theo Klein said.
“These value additions could likely increase house prices in these neighbourhoods and support further growth to overall property prices in central Namibia. According to FNB’s House Price Index Report, central property prices increased by 0.5% in 2021 compared to 2020.”
In the period under review, 86 new building projects were completed, compared to 130 in the prior month, a 33.8% decline month on month and 235 in April 2021, 63.4% decline year on year.
“The completed projects had a total value of N$95.6 million (compared to N$96.1 million for projects completed in April 2021) and were mainly for additions (N$60.1 million), new houses (N$33.1 million) and walls (N$2.4 million). We might see more commercial projects taking off in future as annual growth in corporate mortgages has been trending upwards YTD, whereas annual growth in household mortgages are trending downward,” he said.
During April 2022, a total of 95 building plans worth N$120 million were approved in Swakopmund, compared to 34 in the prior month and 38 in April 2021.
“During April 2022, 38 building projects were completed, compared to 24 in the prior month, a 58.3% increase month on month and 34 in April 2021, an increase of 11.8% year on year. The completed projects had a total value of N$27,1 million and were mainly for residential additions (N$3.4 million), new houses (N$18.6 million), new flats (N$4.6 million) and additions to commercial buildings (N$424,800),” Klein said.
“In his outlook, he said construction activity seems to be declining in Windhoek, whereas construction activity in Swakopmund might be increasing based on the YTD trend of plan approvals. Faster growth in corporate mortgages might also suggest that we might see an uptick in additions or new commercial properties. Annual change in household mortgages are declining and might suggest that households are using savings to pay for home additions. However, the rise in building costs and interest rates might lead to building project delays or postponements for the plans that have been approved in recent months.”
