The real value of recorded building plans passed by larger municipalities, at constant 2005 prices, during January to May 2010 decreased by 18,6% or R3,702bn compared with January to May 2009, Statistics South Africa said on Wednesday.

Data from Statistics South Africa said the biggest decrease was reported for non-residential buildings, -42,8% or -R2,6bn, followed by additions and alterations, -8,5% or -R534m, and residential buildings at -6,8% or -R507m.

Figures showed that the seasonally adjusted real value of recorded building plans passed by larger municipalities during the three months ended May 2010 decreased by 0,6% compared with the three months ended February 2010.

The decrease was due to plans passed for non-residential buildings at -4,8%.

The decreases were counteracted to a certain extent by the increases reported for residential buildings, 0,8% and additions and alterations, 0,5%.

The value of buildings reported as completed to larger municipalities at current prices during January to May 2010 decreased by 18,7% or -R3,9bn compared with January to May 2009.

The biggest percentage decrease was reported for residential buildings, followed by additions and alterations and non-residential buildings.

Six of the nine provinces reported decreases in the value of buildings completed during January to May 2010, with Gauteng the biggest contributor to the overall decline with -11,2%, followed by the Western Cape which added -5,2%.

The South African residential property market has been in doldrums over the past year following the economic recession that saw massive job losses and repossessions.

Jacques du Toit, property strategist at Absa, said the contraction in residential building activity continued up to May 2010, but a slower pace of contraction was seen in May.

He said building activity with regard to houses larger than 80sqm continued to show a decelerating pace of contraction since mid-2009, with the year-on-year (y/y) growth in plans approved turning positive recently. “In the segment for houses smaller than 80sqm, conditions have improved in the planning and construction phase.” – Eugene Brink and I-Net Bridge

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