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19 Dec 2012

The value of recorded building plans passed (at current prices) increased by 8.3 percent (R4 584 9 million) during January to October 2012.

The construction phase of new housing saw volume increases driven by the segments for small houses and flats and townhouses.

According to Statistics South Africa (Stats SA) October report, the biggest increase was reported for residential buildings (11.4 percent or R2 756 8 million), followed by additions and alterations (8.8 percent or R1 517 9 million) and non-residential buildings (2.3 percent or R310 2 million).

The increase in the value of building plans passed was dominated by Gauteng (contributing 6.3 percentage points or R3 478 4 million) and Western Cape (contributing 3.9 percentage points or R2 179 7 million).

The decrease reported for KwaZulu-Natal (contributing -3.6 percentage points or -R1 970 5 million) counteracted the increases reported for building plans passed to a certain extent, according to the report.

Stats SA says the real value of recorded building plans passed (at constant 2010 prices) increased year-on-year (y/y) by 2.3 percent (R1 192.9 million) during January to October 2012.

The biggest increase was reported for residential buildings (5.2 percent or R1 201 0 million), followed by additions and alterations (2.7 percent or R445.6 million).

The decrease reported for non-residential buildings (-3.5 percent or -R453.6 million) counteracted the increase to a certain extent, reveals the report.

According to Stats SA, the seasonally adjusted real value of recorded building plans passed increased by 6.7 percent in the three months ended October 2012 and the biggest increase was reported for residential buildings (10.2 percent), followed by non-residential buildings (8.5 percent) and additions and alterations (0.7 percent).  

Meanwhile, the value of buildings reported as completed (at current prices) increased by 4.0 percent (R1 405 9 million) during January to October 2012 and increases were reported for non-residential buildings (12.4 percent or R1 049 0 million) and residential buildings (7.3 percent or R1 253 6 million), while a decrease was reported for additions and alterations (-9.4 percent or -R896.8 million) during the above-mentioned period.

According to Stats SA, the seasonally adjusted real value of recorded building plans passed increased by 6.7 percent in the three months ended October 2012 and the biggest increase was reported for residential buildings (10.2 percent), followed by non-residential buildings (8.5 percent) and additions and alterations (0.7 percent).

Six provinces reported y/y increases in the value of buildings completed during January to October 2012 dominated by Gauteng (contributing 5.5 percentage points or R1 925 8 million) and a large decrease was reported in KwaZulu-Natal (contributing -2.8 percentage points or -R984.9 million).

Stats SA says the real value of buildings reported as completed (at constant 2010 prices) decreased y/y by 1.1 percent (-R378.6 million) during January to October 2012 with a large decrease was reported for additions and alterations (-13.7 percent or -R1 313.3 million), while increases were reported for non-residential buildings (8.1 percent or R700.8 million) and residential buildings (1.4 percent or R233.9 million).

The seasonally adjusted real value of buildings reported as completed increased by 10.6 percent in the three months ended October 2012 with two of the three major categories reported increases, namely non-residential buildings (37.6 percent) and additions and alterations (9.2 percent), while a decrease was reported for residential buildings (-0.6 percent).

According to Absa, in the first 10 months of 2012, the volume of building plans approved for new housing was down from the corresponding period a year ago, with the construction phase recording low single-digit growth over the same period.

The real value of plans approved for new residential buildings was up by R1.2 billion or 5.2 percent y/y to R24.24 billion (R23.03 billion a year ago).

Writing in the report, Absa Home Loans property analyst Jacques du Toit says the real value of new residential buildings completed increased by R233.97 million or 1.4 percent y/y to R17.16 billion in the period January to October from R16.92 billion in the same period last year.

Du Toit says the volume of new housing units for which building plans were approved increased from 3 701 units in June to 5 304 units in October.

This translates to a cumulative rise of 1 603 units or 54.1 percent in the four-month period. September and October this year saw a y/y increase of 26.4 percent and 46.2 percent respectively in plans approved, he says.  

He explains that the construction phase of new housing saw volume increases driven by the segments for small houses and flats and townhouses.

Du Toit notes that in September and October, the number of new housing units constructed was down by 15.2 percent y/y and 2.3 percent y/y respectively.

With planning activity in the categories of smaller-sized houses and flats and townhouses contracting during the course of the year, this may adversely affect construction activity of these types of housing during next year, he points out.

Building activity in respect of alterations and renovations to existing houses remained subdued up to October 2012, which is believed to be related to the state of homeowner finances.

Against the background of economic developments, the state of household finances and the level of consumer confidence, residential building activity may remain subdued in the short to medium term, although the recent uptick in planning activity is expected to lend some support to new housing construction in 2013, he adds. – Denise Mhlanga

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