21 Oct.
Residential building activity continues to reflect housing market conditions.
Levels of activity in respect of new housing construction in South Africa were up in the first eight months of 2011 compared with the corresponding period in 2010, especially in terms of the planning of flats and townhouses. The construction of new housing was marginally higher in the period January to August this year compared with a year ago, with the category of flats and townhouses contracting by just more than 19% year-on-year (y/y) during this period. On a monthly basis, however, residential building activity was lower on the planning as well as on the construction side in August.
The number of new housing units for which building plans were approved was up by 12,8% y/y, or 4 197 units, in January to August this year. This improvement was largely supported by strong growth of 46,3% y/y in the higher-density segment of flats and townhouses. However, the total number of housing units for which plans were approved was down by 3,6% y/y to 4 949 units in August. Compared to July, the volume of plans approved was down by 1 190 units in August, driven by the segment for smaller-sized houses, which showed a drop of 1 083 units month-on-month.
New housing construction increased by only 1,9% y/y in the first eight months of the year. The low year-on-year growth in levels of activity in the construction phase came on the back of a decline of 1 335 units, or 19,2% y/y, in the number of flats and townhouses completed. This may be a reflection of supply and demand conditions still prevailing in this segment of the market. In August the volume of new housing units completed was down by 7,3% year-on-year to a level of 3 247, which were 466 units less than the number of 3 713 completed in July. The real value of plans approved for new residential buildings was up by 3,9% y/y to R12,69 billion in the period January to August 2011 (R12,21 billion in the same period last year).
The real value of new residential buildings reported as completed in the first eight months of the year was down by 8% y/y to R9 billion, from R9,79 billion a year ago. These real values are calculated at constant 2005 prices.
Residential building activity will continue to reflect conditions and developments with regard to the economy and household finances, with the affordability of housing set to remain an important factor. As a result, the focus of new housing demand and supply is expected to be on the segments of smaller-sized houses and higher-density flats and townhouses. …
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