Bheki Mpofu
20 November 2008
Johannesburg — RESIDENTIAL building activity declined significantly in the first three quarters compared to the same period last year as the downturn in the economy put the brakes on demand for housing, according to Stats SA figures released yesterday.
The slowdown in residential building has already had negative effects on contractors, brick manufacturers and materials suppliers, which have reported declines in sales.
In the period from January to September the real value - adjusted for inflation - of building plans approved by local authorities for new residential buildings was down 22,6% year on year to R15,29bn. This was R4,46bn less than the R19,75bn in the same period last year.
Absa senior property analyst Jacques du Toit said building activity was expected to remain under pressure for the next 12 months as tough economic conditions were expected to persist .
"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," Du Toit said.
The number of residential building plans approved for the three major segments of the market was 17,8% lower year on year at 65154 units in the first three quarters of this year. In the same period last year, plans were approved for a total of 79304 units.
Du Toit said the continued decline in plans approved for new housing up to September would result in fewer units being constructed towards the end of this year and into next year.
The real value of new residential buildings completed was down 10,5% year on year to R11,89bn in the period from January to September, which was R1,4bn less than the R13,29bn in the first nine months of last year.
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