Building approvals fall in August as project values rise

CHAMWE KAIRA

The building sector recorded fewer approved plans in August, although the total value of approvals increased sharply, driven mainly by larger commercial and industrial projects in Swakopmund.

Combined building-plan approvals in Windhoek and Swakopmund fell to 238 units in August from 325 in July, a 26.8% month-on-month decline.

However, the value of approved projects increased by 37.6% to N$413.1 million from N$300.1 million, Simonis Storm statistics revealed.

The divergence was largely due to a concentration of higher-value approvals in Swakopmund rather than a broad-based increase in construction activity.

In Windhoek, 145 building plans were approved in August, down 40.6% from 244 in July and 17.6% below the 176 approvals recorded in August 2025.

The value of approvals declined to N$163.2 million from N$206.4 million in July and was 24.3% lower than the N$215.7 million recorded in August 2025.

The average value per approved plan nevertheless increased to about N$1.13 million from approximately N$846 000 in July, indicating a greater contribution from larger projects despite the decline in approval volumes.

Windhoek recorded 17 completed projects valued at N$21.3 million in August, compared with 24 completions worth N$33.8 million in July.

For the first eight months of the year, Windhoek recorded 1 390 approved plans, 1.5% higher than the 1370 recorded during the same period in 2025.

The cumulative value of approvals stood at N$1.16 billion, compared with N$2.12 billion a year earlier. The 2025 figure was boosted by a single N$1 billion commercial project approved in March last year.

Swakopmund, meanwhile, recorded 93 approved plans in August, up 14.8% from 81 in July and 9.4% higher than the 85 approvals recorded in August 2025.

The value of Swakopmund approvals surged to N$249.9 million from N$93.8 million in July and N$96 million in August 2025.

The increase was attributed to several larger commercial and industrial approvals, together with one substantial residential development.

Swakopmund recorded 52 completed projects worth N$41.1 million in August, compared with 58 completions valued at N$38.7 million in July.

Year-to-date, the coastal town has approved 627 plans worth N$801.7 million, compared with 549 plans valued at N$555.8 million during the same period last year. This represents growth of 14.2% in the number of approvals and 44.3% in their value.

The sector is also facing changes to labour costs. The Construction Industries Federation of Namibia and the Metal and Allied Namibian Workers Union concluded a two-year wage agreement effective from 1 September.

Under the agreement, minimum pay for general workers increases by 5% to N$20.43 per hour in the first year and N$21.45 from September 2027.

The agreement also provides for corresponding increases for artisans, drivers, plant operators, mechanics and administrative employees, as well as changes to allowances, pension enrolment and safety provisions.

The ministry of justice and labour relations also clarified in September that security guards working at construction sites must receive the national minimum wage of at least N$16 per hour rather than the lower sector-specific rate.

The changes are expected to increase labour costs in the construction industry while providing greater certainty around wage costs.

The Bank of Namibia maintained its repo rate at 6.75% in August, leaving the monetary policy rate unchanged for a second consecutive month.