By:Justicia Shipena

Windhoek and Swakopmund have Namibia’s highest construction costs for a typical three-bedroom home, says First Capital in its Building Cost Index for June 2023.

The biennial report provides an insight into the trend of prices of building materials and the impact of price changes on the cost of building a house in the country.

Equally, the report provides an overview of the impact of imported building materials on house prices particularly because of the ongoing conflict between Russia and Ukraine which analysts claim, can easily affect the whole world due to globalisation.

First Capital, a financial services company specialising in providing asset management, investment banking and property management services, says in its analysis that Windhoek has the highest building costs, at N$636,651. Swakopmund came in second with a cost of N$629,373.

“This is largely attributed to the higher land prices in these towns,” the report pointed out.
Building a typical three-bedroom home in Namibia costs N$510,182 in Keetmanshoop, N$498,231 in KatimaMulilo and N$477,804 in Ondangwa, according to pricing as of June 2023.

The First Capital report indicates the cost of the materials required for doors and windows increased by 39% on an annual basis, which is the most significant rise.
It further says painting supplies increased by 17%.

However, the price of brickwork, roofing and ceiling materials all increased by 22% and 21%, respectively, and the foundation and construction expenses also increased by 21%.
The report mentioned that the price of plumbing supplies only went up by 6%.
“Electrical and tiling material costs increased at a moderate pace, with hikes of 8% and 18% respectively.”

Using the pricing as of June 2023, First Capital says the bill of quantities for a typical three-bedroom house reveals an average total cost of N$318,557 in KatimaMulilo, N$ 303,360 in Ondangwa and N$303,580 in Rundu.

The identical materials were priced at N$300,974 in Windhoek, N$302,409 in Swakopmund and N$318,255 in Keetmanshoop, according to the report.

The cost of transportation from the harbour or from their primary suppliers, First Capital says, can be the cause of these disparities in the price of building materials among towns.

The analysis also shows, due to their greater proximity to the harbour and the fact that construction supplies are often supplied by sea, the cost of building materials in Swakopmund and Keetmanshoop was typically cheaper throughout the assessment period compared to the central and northern districts.

“The price for a standard plot of land (erf) of 375 square meters intended for a three-bedroom house is calculated by multiplying the price per square meter of serviced land in each town,” the report states.

The price of a normal plot is greatest in Windhoek at N$196,875, then N$187,500 in Swakopmund, N$46,125 in Keetmanshoop, N$33,750 in KatimaMulilo, N$31,500 in Rundu and N$30,000 in Ondangwa.
Namibia imported 58% of its electronic and electrical equipment from South Africa in 2022, making it the country’s main supplier. Germany and India each contributed 3% and 2%, while China came in second with a substantial 37% stake.

“In nominal terms, the value of electrical and electronic equipment imported from South Africa amounted to US$187.62 million. China, Germany and India followed with total values of US$120.6 million, US$8.37 million, and US$5.8 million,” the report states.

Namibia imports from United Arab Emirates of electrical, electronic equipment was US$899.22 thousand during 2022.

These import sources, First Capital says, have an impact on the price of electrical and electronic building materials used in Namibia and, eventually, the price of constructing a home.

First Capital further points out, Namibia cannot produce enough plumbing supplies domestically to fulfil domestic demand and largely dependents on imports.

As a result, the majority of plumbing supplies, such as pipes, fittings, fixtures and associated parts, are imported from abroad.
Last year, China accounted for 68% of Namibia’s imports of plumbing supplies, followed by the US with 30% and South Africa with 2%.

The reliance on imports leaves the prices of key materials on the local market vulnerable to outside shocks.

“These shocks could include exchange rate fluctuations, inflation in these source countries, changes in international trade policies, or geopolitical tensions.”