Residential building statistics 21 March 2014, Absa Home Loans ,Compiled by Jacques du Toit Property Analyst Planning phase with regard to residential building activity improves, while construction phase contracts in early 2014 The level of building activity in the South African market for new housing showed significant growth with regard to the planning phase in the first month of 2014 compared with a year ago, whereas the construction phase contracted in January from its level of activity in the same month last year. The number of new housing units for which building plans were approved, increased markedly by 46,7% year-on-year (y/y) to 4 765 units in January 2014. This growth was largely driven by the segments of houses less than 80m² and flats and townhouses, recording strong growth of 74,3% y/y and 64,9% y/y respectively. These two segments of the market comprised 73,7% of the total number of plans approved regarding new housing in January. At a regional level the volume of plans approved in respect of new housing showed strong year-on-year growth in Gauteng, the Free State and Mpumalanga. The level of activity in the construction phase of new housing, i.e. the number of new units reported as completed, dropped by 18,3% y/y to 2 256 units in January from 2 760 units in January last year. This poor showing with regard to new housing built was the result of significant contractions in the segments of houses less than 80m² (-20,4% y/y) and flats and townhouses (-37,2% y/y), with seven of the nine provinces that recorded a drop in the number of new housing units built in January compared with a year ago. The average building cost of new housing constructed came to R5 586 per square metre in January 2014, which was up by 15,6% from R4 831 per square metre in the corresponding month last year, when building costs rose by 14,8% y/y. Building costs are affected by factors such as building material costs, labour costs, transport costs, equipment costs, land values, rezoning costs where applicable, and developer and contractor holding costs and profit margins. The first month of 2014 saw the real value of plans approved for new residential buildings rising by 36,9% y/y, or R756,56 million to R2,65 billion from R1,9 billion a year ago. The real value of residential buildings reported as completed increased by 7,1% y/y, or R103,94 million, to R1,58 billion in January from R1,47 billion twelve months ago. These higher real values of residential building activity are related to above-inflation building cost increases. Building confidence rose in the first quarter of 2014 to its highest level since the third quarter of 2008, mainly affected by continued growth in non-residential building activity. Residential building activity will in 2014 continue to be affected by economic trends, household finances, property-investment sentiment and consumer confidence in general.
Posted on: Mon, 24 Mar 2014 09:02:21 +0000
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