The residential building and construction sector continued to experience some tough conditions up to mid-2010, Absa said on Wednesday.
This followed the earlier release of building statistics by Statistics SA.
According to the Pretoria-based agency the real value of plans approved for new residential buildings dropped by 5.0 percent year-on-year to a level of R8,61 billion in the first half of 2010 from R9,07 billion in the same period last year.
The real value in respect of new residential buildings constructed was down by 21,8 percent year-on-year to R7,15 billion in the first six months of the year from a level of R9,14 billion in the corresponding period of 2009.
These real values were calculated at constant 2005 prices.
Absa's Senior Property Analyst Jacques du Toit said that in the planning phase of new housing, reflected by building plans approved, levels of activity were very much under pressure in the first half of 2010, "especially in the segments of housing less than 80 square metre and higher-density housing (flats and townhouses)."
In the month of June, a further year-on-year decline was recorded in plans approved by local authorities for new housing, although this contraction was relatively small.
Du Toit said the construction phase of new housing contracted significantly on a year-on-year basis in all segments of the market in the period January to June 2010.
"With the construction of new housing lagging the planning phase, any improvement in conditions regarding the volume of plans approved will be reflected on the construction front at a later stage."
Conditions in the residential building and construction sector were forecast to remain tough in the short term, with expectations of improved levels of activity towards the end of the year and into 2011. - Sapa
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