New Era Newspaper

New Era Epaper
Icon Collap
Home / Residential construction activity gains momentum

Residential construction activity gains momentum

2022-08-17  Edgar Brandt

Residential construction activity gains momentum

Despite more modest growth being experienced in Namibian household mortgages, compared to corporate mortgages, pipeline construction activity in the residential segment of the market continues to record more momentum. 

This is according to a report by local stock brokerage Simonis Storm (SS) on the latest building statistics in the country, which showed household mortgage growth averaged 2.4% for the year-to-date (YTD), compared to 4.3% for corporates. 

At the same time, SS noted municipalities in Windhoek and Swakopmund approved a combined 830 residential building plans YTD with a value of N$820 million, compared to only 25 commercial building plans being approved with a value of N$65.3 million. 

“Naturally, we are excluding other crucial municipalities (e.g. Walvis Bay and Oshakati), but the data seems to suggest we could either see an increase in household mortgages to finance these building projects in the near future or households might be financing residential construction by other means in response to rising interest rates,” the SS report stated. 

The SS analysis further pointed out that holdings in the money market and enhanced cash unit trust funds have increased by 18.9% over the last two years from N$20.9 billion in the second quarter of 2020 to N$24.8 billion in the second quarter of 2022. 

This is according to data from Sanlam Namibia. 

“It could be that these funds are used by some households to finance construction or renovation projects, bypassing loans and rising interest rates. On the other hand, slower growth in corporate mortgages could be explained by companies enforcing hybrid working arrangements as demand for office space wanes,” SS explained. 

Meanwhile, the latest data from the City of Windhoek (CoW) showed 314 building plans were approved during July 2022, compared to 249 in the prior month, representing an increase of 26.1% month-on-month and an increase of 40.8% year-on-year, compared to July 2021 when only 223 building plans were approved. 

Approved plans in Windhoek have a total value of N$496 million, compared to N$399.5 million in June 2022 and include 179 plans for new residential additions, new residential properties (112 plans), new walls (16 plans), new commercial buildings (five plans) and new pools (two plans).

The statistics show building completions in Windhoek continued rising for a third consecutive month, as 88 building completions took place during July 2022, compared to 74 building completions in the prior month, which is an increase of 18.9% month-on-month and 36 in July 2021, which rose by 144.4% year-on-year. 

The completed projects had a total value of N$51.7 million, compared to N$43.9 million for projects completed in June 2022 and included 46 residential additions (N$6.8 million), 32 residential properties (N$41.4 million), one commercial building (N$3 million) and nine walls (N$0.5 million). 

At the coast, the Swakopmund Municipality approved 26 building plans during July 2022, compared to 90 in the prior month, which is a decrease of 71.1% month-on-month and 37 in July 2021, down by 29.7% year-on-year. 

Approved plans in Swakopmund have a total value of N$43.1 million, compared to N$74.1 million in June 2022 and were solely for 26 new residential plans. 

Building completions in Swakopmund rebounded in July 2022, following a significant drop in June 2022. 

During July 2022, 49 buildings were completed, compared to 18 in the prior month, which is an increase of 172.2% month-on-month and 12 in July 2021, representing a 308.3% increase year-on-year. 


2022-08-17  Edgar Brandt

Share on social media