RESIDENTIAL building activity continued to slow considerably in October compared with the same period a year ago, as demand and supply in the housing sector continued to feel the effects of the economic downturn.
Between January and October the real value — adjusted for inflation — of building plans approved by local authorities for new residential buildings was down 24,2% year on year to R16,7bn, according to figures released by Stats SA yesterday.
This was R5,32bn less than the R22bn recorded in the same period last year, and followed a 22,6% drop to R15,29bn in the nine months to September in the real value of building plans.
All real values are at constant 2000 prices.
Analysts have forecast that residential building activity will remain under pressure in coming months as tough economic conditions are expected to persist well into next year.
Absa senior property analyst Jacques du Toit said recently that the continued decline in plans approved for new housing would result in fewer units being constructed towards the end of this year and into next year.
“In view of current economic conditions and expectations into next year, which are having and will have an adverse effect on the household sector, residential building activity is forecast to remain under pressure for most of the next 12 months.”
The real value of new residential buildings completed was down 8,7% year on year to R13,5bn between January and October, which was R1,3bn less than the R14,8bn recorded in the first 10 months last year.
At a regional level, the number of plans approved for new housing units in January-October was down about 25% year on year in the two most prominent provinces — Western Cape and Gauteng.
KwaZulu-Natal continued to register growth over the period, supported by the lower end of the market.
In terms of the number of housing units completed at provincial level, year on year in January to September this year; again largely driven by the lower end of the market:
High interest rates, more stringent requirements for credit and economic uncertainty have caused a severe drop in building activity, with municipalities passing fewer building plans this year.
The slowdown in residential building has already had negative effects on contractors, brick manufacturers and materials suppliers. - Business Day - News Worth Knowing
Between January and October the real value — adjusted for inflation — of building plans approved by local authorities for new residential buildings was down 24,2% year on year to R16,7bn, according to figures released by Stats SA yesterday.
This was R5,32bn less than the R22bn recorded in the same period last year, and followed a 22,6% drop to R15,29bn in the nine months to September in the real value of building plans.
All real values are at constant 2000 prices.
Analysts have forecast that residential building activity will remain under pressure in coming months as tough economic conditions are expected to persist well into next year.
Absa senior property analyst Jacques du Toit said recently that the continued decline in plans approved for new housing would result in fewer units being constructed towards the end of this year and into next year.
“In view of current economic conditions and expectations into next year, which are having and will have an adverse effect on the household sector, residential building activity is forecast to remain under pressure for most of the next 12 months.”
The real value of new residential buildings completed was down 8,7% year on year to R13,5bn between January and October, which was R1,3bn less than the R14,8bn recorded in the first 10 months last year.
At a regional level, the number of plans approved for new housing units in January-October was down about 25% year on year in the two most prominent provinces — Western Cape and Gauteng.
KwaZulu-Natal continued to register growth over the period, supported by the lower end of the market.
In terms of the number of housing units completed at provincial level, year on year in January to September this year; again largely driven by the lower end of the market:
- Western Cape registered decline of 30,9%
- Mpumalanga registered growth of 0,5%
- KwaZulu-Natal registered growth of 22,4%
- Gauteng registered growth of 33,4%
High interest rates, more stringent requirements for credit and economic uncertainty have caused a severe drop in building activity, with municipalities passing fewer building plans this year.
The slowdown in residential building has already had negative effects on contractors, brick manufacturers and materials suppliers. - Business Day - News Worth Knowing
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