More building plans approved in SA

The value of recorded building plans passed at current prices was 4.7 percent higher (R442.5 million) during January to February 2012.

The value of recorded building plans passed at current prices was 4.7 percent higher (R442.5 million) during January to February 2012. According to Statistics South Africa (Stats SA), this figure was high when compared with January to February 2011.

According to Statistics South Africa (Stats SA), this figure was high when compared with January to February 2011.

The February report on building statistics reveals that increases were reported for residential buildings (27.3 percent or R965.1 million) and additions and alterations (6.8 percent or R209.5 million) compared to a decrease reported for non-residential buildings (-26.5 percent or -R732.0 million).

Six provinces reported year-on-year (y/y) increases in the value of building plans passed during January to February 2012.

The increase in the value of building plans passed was dominated by Gauteng (contributing 5.9 percentage points or R552.7 million), followed by Western Cape (contributing 2.4 percentage points or R221.1 million), Free State (contributing 1.9 percentage points or R174.3 million) and Northern Cape (contributing 1.5 percentage points or R139.4 million).

The biggest decrease was reported in KwaZulu-Natal (contributing -8.0 percentage points or -R750.1 million).

According to Stats SA, the real value of recorded building plans passed (at constant 2005 prices) decreased y/y by 1.7 percent (-R105,1 million) during January to February 2012, due to a large decrease reported for non-residential buildings (-31.1 percent or -R579.8 million).

Increases reported for residential buildings (19.6 percent or R466.5 million) and additions and alterations (0.4 percent or R8.2 million) counteracted the decrease reported for non-residential buildings to a large extent.

The report notes that the seasonally adjusted real value of recorded building plans passed increased by 6.2 percent during the three months ended February 2012 compared with the three months ended November 2011.

Increases were reported for additions and alterations (15.8 percent) and residential buildings (13.5 percent) and a decrease of -15.6 percent for non-residential buildings was recorded.

The total value of buildings reported as completed at current prices increased by 9.7 percent (R543.5 million) during January to February 2012 compared with January to February 2011.

The increase in the value of building plans passed was dominated by Gauteng (contributing 5.9 percentage points or R552.7 million), followed by Western Cape (contributing 2.4 percentage points or R221.1 million), Free State (contributing 1.9 percentage points or R174.3 million) and Northern Cape (contributing 1.5 percentage points or R139.4 million).

Increases were reported for non-residential buildings (39.8 percent or R448.1 million) and residential buildings (12.1 percent or R325.3 million) while a decrease was reported for additions and alterations (-12.8 percent or -R229.9 million) during the above-mentioned period.

Five provinces reported y/y increases in the value of buildings completed during January to February 2012.

The provinces mainly responsible for the increase of 9.7 percent were Gauteng (contributing 8.1 percentage points or R455.9 million) and Western Cape (contributing 6.1 percentage points or R341.1 million) while the largest decrease was reported in KwaZulu-Natal (contributing -4.9 percentage points or -R276.5 million).

Stats SA says the real value of buildings reported as completed (at constant 2005 prices) increased by 5.0 percent (R195.0 million) during January to February 2012 compared with January to February 2011.

Increases were reported for non-residential buildings (35.0 percent or R280.5 million) and residential buildings (6.2 percent or R116.4 million).

In contrast, a decrease was reported for additions and alterations (-16.1 percent or -R201.9 million).

The seasonally adjusted real value of buildings reported as completed increased by 5.1 percent during the three months ended February 2012 compared with the three months ended November 2011.

The biggest increase was reported for non-residential buildings (24.9 percent), followed by residential buildings (2.9 percent) and a -7.1 percent decrease was reported for additions and alterations.

Meanwhile, Absa reports that the level as well as the real value of building activity in the South African housing market showed some noticeable improvement in the first two months of 2012 compared with a year ago, especially with regard to the planning phase.

The bank says the number of new housing units for which building plans were approved by local government institutions was up by 27 percent y/y or 1 613 units to a total of 7 581 units in the period of January and February this year, with most of this growth evident in the Gauteng province.

The increase in plans approved was largely driven by strong growth in the categories of houses smaller than 80 square metres and houses equal to and larger than 80 square metres.

The increase in plans approved was largely driven by strong growth in the categories of houses smaller than 80 square metres and houses equal to and larger than 80 square metres.

These two segments of the market accounted for 78.3 percent of the total number of new housing units for which building plans were approved in the first two months of the year, says Jacques du Toit, property analyst at Absa Home Loans.

He says the  volume of new housing units constructed in January and February 2012 increased by almost 10 percent y/y or 497 units  to a total of 5 608 units from the corresponding period in 2011, largely driven by the Western Cape and Gauteng regions.

“The small house category still showed some contraction on a y/y basis”.

“The other two segments recorded substantial growth with a combined share of 59 percent in the total number of new housing units constructed in the first two months of the year.”

Du Toit says in January and February 2012 the real value of plans approved for new residential buildings was 19.6 percent y/y or R466.5 million higher at R2.85 billion (R2.383 billion in January and February 2011).

He says the real value of new residential buildings constructed was up by 6.2 percent y/y or R116.4 million to a total of R1.983 billion in January and February from R1.867 billion in the same period last year.

“The improvement in building activity in the initial stages of 2012 is encouraging, especially with regard to the planning phase, as these levels of activity are expected to be reflected in the construction phase later this year,” says Du Toit.

He adds that the y/y growth of 19.3 percent recorded in the number of flats and townhouses constructed in the first two months of 2012 can be regarded as a reflection of the strong growth of 20 percent y/y in the planning phase in 2011. - Denise Mhlanga