Based on statistics released by Statistics South Africa, residential building activity has slowed
down markedly during the first three quarters of 2008 compared with a year ago. This came on
the back of economic developments and their effect on the household sector, impacting
housing demand and supply conditions. However, the third quarter statistics indicated much
smaller year-on-year declines than recorded in the second quarter, largely influenced by
positive trends at the lower end of the market.
In the period January-September this year the real (i.e. after adjustment for inflation) value of
building plans approved by local authorities for new residential buildings was down by 22,6%
year-on-year (y/y) to a level of R15,29 billion (R4,46 billion less than the R19,75 billion
recorded in the same period last year). All real values are at constant 2000 prices.
The number of residential building plans approved for the three major segments of the market
(houses of <80m², houses of ≥80m² and flats and townhouses) was 17,8% y/y lower at 65 154
units in the first three quarters of 2008. In the same period last year, plans were approved for a
total of 79 304 units. The continued decline in the number of plans approved for new housing
up to September this year compared with a year ago will result in a lower number of units
being constructed towards end-2008 and into 2009.
The real value of new residential buildings completed was down by 10,5% y/y to R11,89 billion
in the period January-September 2008, which was R1,4 billion less than the R13,29 billion
recorded in the first nine months of 2007.
In the three quarters up to September this year the number of new housing units constructed in
the abovementioned three segments of the market was 11,1% y/y down at 51 731 units from
58 197 units completed in the same period last year.
At a regional level, the number of plans approved for new housing units in January-September
2008 was down by more than 25% y/y in the two most prominent provinces, i.e. the Western
Cape (26,7% of the national total) and Gauteng (34,2% share). KwaZulu-Natal (16,7% share)
registered growth of 7,6% y/y over the three quarters, supported by the lower end of the
market. In terms of the number of housing units completed at provincial level, the Western
Cape showed a decline of 30,9% y/y in January-September 2008, while Mpumalanga,
KwaZulu-Natal and Gauteng registered growth of 33,4%, 22,4% and 0,5% y/y respectively
during this period, again largely driven by the lower end of the market in these three provinces.
In view of current economic conditions and expectations towards the end of 2008 and into next
year, which are having and will have an adverse effect on the household sector and thus the
demand for housing, residential building activity is forecast to remain under pressure for most
of the next 12 months.
Number % change Number % change
Houses of <80m² 24 162 -15.1 17 373 -18.5
Houses of >80m² 17 131 -30.8 15 193 -7.2
Flats & townhouses 23 861 -8.5 19 165 -6.6
Total 65 154 -17.8 51 731 -11.1
Source: Stats SA
Residential building statistics (January