Windhoek Records Highest Monthly Building Project Completions Since February 2022

Windhoek, Namibia, has marked a significant milestone in its construction sector with 175 completed building projects in April 2024, valued at N$58.2 million. This figure represents the highest monthly completion rate since February 2022.

Khomasdal and Wanaheda emerged as the most active construction areas during this period, reflecting a concentrated effort in these regions. Other notable areas with high construction activity include Klein Windhoek, Katutura, and Goreangab.

The increase in building projects is part of a broader trend observed in Windhoek's construction sector. The city saw a 2.6% month-on-month increase in approved building plans from February to March 2024, with approvals rising from 192 to 197. On an annual basis, there was a slight 1% year-on-year increase in approvals.

In the first quarter of 2024, Windhoek recorded 465 approved building plans totaling N$539.8 million, compared to 458 approvals in the same period of 2023. This growth highlights a steady demand for construction projects in the city.

However, the construction sector has faced challenges due to elevated interest rates. The repo rate, which was 6.75% in January 2023, rose to 7% by the end of March and currently stands at 7.75%. These higher rates have increased borrowing costs, impacting the number of completed projects.

Simonis Storm Securities noted that other factors contributing to the decline in completed projects include soaring prices of building materials and plots, stricter lending policies, and challenges in private sector credit extension for mortgage loans. Corporate mortgage loan growth averaged -2.8%, while mortgage loan growth within household debt instruments remained subdued at 2%.

Despite these challenges, the residential segment continues to dominate the market. In Windhoek, 76% of approved plans were for additions to existing buildings, while 16% were for new houses.

Windhoek's construction sector shows resilience and growth potential, even amid economic challenges. The city's ability to maintain a steady rate of building project completions and approvals reflects its ongoing development and urban expansion.

Key Takeaways

• Windhoek, Namibia, completes 175 building projects in April 2024, valued at N$58.2 million.
• Khomasdal and Wanaheda are the most active construction areas in Windhoek.
• Approved building plans in Windhoek increase by 2.6% month-on-month from Feb to Mar 2024.
• Elevated interest rates and high building material prices challenge the construction sector.
• Residential segment dominates the market, with 76% of approved plans for additions to existing buildings.