Compiled by Jacques du Toit Property Analyst Absa Home Loans 15 Troye Street Johannesburg 21 PO Box 7735 Johannesburg 2 South Africa Tel +27 ()11 35 7246 jacques@absa.co.za www.absa.co.za Explanatory note: The residential building statistics refer to private-sector financed housing, largely excluding government-subsidised low-cost housing, for which information was reported by local government institutions. The information in this publication is derived from sources which are regarded as accurate and reliable, is of a general nature only, does not constitute advice and may not be applicable to all circumstances. Detailed advice should be obtained in individual cases. No responsibility for any error, omission or loss sustained by any person acting or refraining from acting as a result of this publication is accepted by Absa Bank Limited and/or the authors of the material. Residential building statistics 15 February 218 Residential building activity in 217 much in line with trends since 21 Levels of building activity in the South African market for new housing remained subdued in 217, which were much in line with trends since 21 after the economy emerged from recession in 28/9. The planning phase of new housing, as reflected by the number of building plans approved by local government institutions, showed low single-digit growth in 217 from 216. The construction phase of new housing, i.e. the volume of housing units reported as completed, contracted last year after relatively low growth was achieved in 216. These trends are based on data published by Statistics South Africa in respect of building activity related to private sectorfinanced housing (see explanatory note). The number of new housing units for which building plans were approved, increased by only 1,8%, or 1 4 plans, to 57 233 plans in the twelve months up to December last year compared with a year ago. This came to 67,2% of a total of 85 217 plans approved ten years ago in 28. The drop in building plans approved in 217 was largely the result of a combined decline of 5%, or 1 931 plans, to a total of 36 98 plans in the segments of new houses equal to or larger 8m² and flats and townhouses. The number of plans approved for new houses smaller than 8m² increased by 16,9%, or 2 935 plans, to 2 253 plans in 217. The number of new housing units reported as being completed was down by 6%, or 2 53 units to a total of 39 24 units in 217 from 41 527 units built in 216. This contraction in the construction phase was largely the result of a combined decline of 1,1%, or 2 82 units, to a total of 24 976 units in the two segments of new houses. The segment of flat and townhouses houses showed growth of only 2,3%, or 317 units, to 14 48 units constructed in 217. The average building cost of new housing completed was up by 8,1% to an average of R7 151 per square meter in 217, compared with R6 617 per square meter in 216. In real terms, i.e. after adjustment for inflation, residential building costs increased by an average of 2,7% last year, based on an average headline consumer price inflation rate of 5,3% last year. The average building cost per square meter in the three categories of new housing was as follows in January to December 217: Houses of <8m²: R4 814, up by 8,5% on 216. Houses of 8m²: R7 163, up by 7,2% on 216. Flats and townhouses: R8 232, up by 7,4% on 216. Building activity with regard to alterations and additions to existing houses contracted in 217, with the building area approved declining by 1,6% and the building area reported as completed contracting by 4,2%. The building cost of alterations and additions to existing houses increased by 1,9% to R6 564 per square meter in 217 (R5 919 per square meter in 216). In real terms, the building cost in this segment of the property market was up by 5,3% last year. In line with the abovementioned trends in residential building activity, confidence levels in the building industry, i.e. with regard to building material manufacturers, architects, quantity surveyors, building sub-contractors and hardware retailers, remained on a downward trend up the end of last year. Against the background of an expected uptick in economic growth, inflation to remain within the inflation target range of 3%-6%, stable to possibly somewhat lower interest rates, a hopefully more stable political environment and higher levels of confidence and sentiment in general, residential building activity may show some improvement 218.
Residential building activity: January - December 1 Segment Units Units 217 m² Building area 217 Units Units 217 m² Building area 217 216 Number % 216 m² % 216 Number % 216 m² % Houses of <8m² 17 318 2 253 16.9 837 353 983 76 17.5 15 562 14 169-9. 754 23 694 88-7.9 Houses of 8m² 15 899 15 27-4. 4 344 535 4 16 343-5.5 12 234 1 87-11.7 3 66 515 2 871 192-6.4 Flats and tow nhouses 23 12 21 71-5.7 2 379 31 2 345 555-1.4 13 731 14 48 2.3 1 374 532 1 539 872 12. Total 56 229 57 233 1.8 7 561 189 7 435 658-1.7 41 527 39 24-6. 5 195 7 5 15 152-1.7 Period Units y/y % Units y/y % Units y/y % Units y/y % 28 34 173-9.6 21 441-32.5 29 63-1.6 85 217-17. 29 25 115-26.5 13 785-35.7 16 522-44.2 55 422-35. 21 2 752-17.4 14 885 8. 12 275-25.7 47 912-13.6 211 22 567 8.7 15 529 4.3 14 728 2. 52 824 1.3 212 17 793-21.2 16 582 6.8 15 445 4.9 49 82-5.7 213 17 894.6 16 23-2.3 16 35 5.9 5 447 1.3 214 2 717 15.8 17 121 5.7 18 981 16.1 56 819 12.6 215 22 783 1. 16 981 -.8 2 215 6.5 59 979 5.6 216 17 318-24. 15 899-6.4 23 12 13.8 56 229-6.3 217 2 253 16.9 15 27-4. 21 71-5.7 57 233 1.8 28 23 48-14.8 2 357-8.1 26 221-2.7 7 58-8.6 29 24 579 4.7 13 96-31.7 18 462-29.6 56 947-18.7 21 18 858-23.3 1 856-21.9 1 965-4.6 4 679-28.6 211 19 56 3.4 11 456 5.5 9 545-13. 4 57 -.4 212 2 23 2.7 11 569 1. 11 386 19.3 42 978 6.1 213 17 436-12.9 11 538 -.3 12 511 9.9 41 485-3.5 214 15 444-11.4 1 75-6.8 11 849-5.3 38 43-8.3 215 16 12 3.7 12 161 13.1 11 493-3. 39 666 4.3 216 15 562-2.8 12 234.6 13 731 19.5 41 527 4.7 217 14 169-9. 1 87-11.7 14 48 2.3 39 24-6. Residential building activity 1 Houses Houses Flats and Total <8m² 8m² townhouses 1 9 8 7 6 % 5 4 3 2 1 37.9 36. 26.7 27.7 35.4 36.3 Plans approved Residential building activity % share January - December 217 Houses <8m² Houses 8m² Flats and townhouses Home Loans 2
9 Residential building activity Number of houses, flats and townhouses 8 7 6 5 4 3 Plans approved 2 Growth in residential building activity Houses, flats and townhouses 1 % -1-2 -3-4 Plans approved 9 8 7 6 5 4 3 2 1 Residential building activity: plans approved Number of houses, flats and townhouses Houses <8m² Houses 8m² Flats and townhouses Home Loans 3
8 Residential building activity: buildings constructed Number of houses, flats and townhouses 7 6 5 4 3 2 1 Houses <8m² Houses 8m² Flats and townhouses 1 9 8 7 6 5 4 3 2 1 Building confidence index 5 = neutrality 5 6 7 Source: BER 1 9 8 7 6 5 4 3 2 1 Construction confidence index 5 = neutrality 5 6 7 Source: BER Home Loans 4
Residential building activity 1 1994-217 Segment Units % of total Units % of total Houses of <8m² 741 17 42.6 589 39 45.9 Houses of 8m² 518 628 29.8 346 594 27. Flats and tow nhouses 478 954 27.5 348 44 27.1 Total 1 738 599 1. 1 284 73 1. Segment Variable WC EC NC FS KZN NW GAU MPU LIM SA New houses Number 161 196 72 596 6 275 5 81 53 972 42 357 296 477 37 53 2 533 741 17 (<8m²) % of region 39.2 59.8 45.1 54.9 31.3 44. 42.5 42.5 43.7 42.6 % of SA 21.8 9.8.8 6.8 7.3 5.7 4. 5.1 2.8 1. New houses Number 135 494 31 871 5 21 22 286 5 674 31 28 19 768 34 937 16 297 518 628 (>8m²) % of region 33. 26.2 36.1 24.4 29.4 32.5 27.4 39.6 34.7 29.8 % of SA 26.1 6.1 1. 4.3 9.8 6. 36.8 6.7 3.1 1. New flats Number 114 165 17 16 2 64 18 836 68 6 22 548 29 791 15 795 1 193 478 954 and % of region 27.8 14. 18.7 2.7 39.4 23.4 3.1 17.9 21.7 27.5 townhouses % of SA 23.8 3.6.5 3.9 14.2 4.7 43.8 3.3 2.1 1. Total houses, Number 41 855 121 483 13 9 91 23 172 652 96 185 697 36 88 262 47 23 1 738 599 flats and % of region 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. townhouses % of SA 23.6 7..8 5.2 9.9 5.5 4.1 5.1 2.7 1. Segment Variable WC EC NC FS KZN NW GAU MPU LIM SA New houses Number 139 667 53 97 9 881 34 747 46 669 35 43 224 642 26 819 17 214 589 39 (<8m²) % of region 42.5 62.5 67.6 6.1 38.2 5.1 43.3 48. 58.9 45.9 % of SA 23.7 9.2 1.7 5.9 7.9 6. 38.1 4.6 2.9 1. New houses Number 13 691 2 399 2 928 1 375 33 532 19 855 128 864 19 561 7 389 346 594 (>8m²) % of region 31.6 23.6 2. 17.9 27.4 28.1 24.9 35. 25.3 27. % of SA 29.9 5.9.8 3. 9.7 5.7 37.2 5.6 2.1 1. New flats Number 85 246 11 955 1 88 12 697 42 35 15 462 165 59 9 547 4 631 348 44 and % of region 25.9 13.8 12.4 22. 34.4 21.9 31.8 17.1 15.8 27.1 townhouses % of SA 24.5 3.4.5 3.6 12.1 4.4 47.4 2.7 1.3 1. Total houses, Number 328 64 86 324 14 617 57 819 122 236 7 747 518 565 55 927 29 234 1 284 73 flats and % of region 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. townhouses % of SA 25.6 6.7 1.1 4.5 9.5 5.5 4.4 4.4 2.3 1. Residential building activity by province 1 1994-217 Home Loans 5
Segment Period Variable WC EC NC FS KZN NW GAU MPU LIM SA New houses Jan-Dec 16 Number 7 152 1 33 33 83 328 112 6 351 1 14 222 17 318 (<8m²) January - Number 6 137 1 776 36 117 1 551 1 133 8 554 72 229 2 253 December % change -14.2 36.3 9.1-85.4 372.9 911.6 34.7-29. 3.2 16.9 217 % of SA 3.3 8.8.2.6 7.7 5.6 42.2 3.6 1.1 1. New houses Jan-Dec 16 Number 4 639 1 157 185 859 1 339 98 4 915 1 265 632 15 899 (>8m²) January - Number 5 292 1 264 169 687 1 279 763 4 297 943 576 15 27 December % change 14.1 9.2-8.6-2. -4.5-16. -12.6-25.5-8.9-4. 217 % of SA 34.7 8.3 1.1 4.5 8.4 5. 28.1 6.2 3.8 1. New flats Jan-Dec 16 Number 5 741 857 61 378 3 853 932 1 67 437 146 23 12 and January - Number 7 446 484 4 674 3 183 2 43 7 468 171 237 21 71 townhouses December % change 29.7-43.5-93.4 78.3-17.4 119.2-29.6-6.9 62.3-5.7 217 % of SA 34.3 2.2. 3.1 14.7 9.4 34.4.8 1.1 1. Total new Jan-Dec 16 Number 17 532 3 317 279 2 4 5 52 1 952 21 873 2 716 1 56 229 houses, January - Number 18 875 3 524 29 1 478 6 13 3 939 2 319 1 834 1 42 57 233 flats and December % change 7.7 6.2-25.1-27.5 8.9 11.8-7.1-32.5 4.2 1.8 townhouses 217 % of SA 33. 6.2.4 2.6 1.5 6.9 35.5 3.2 1.8 1. Alterations Jan-Dec 16 m² 882 474 268 92 51 572 153 517 366 96 14 29 955 2 15 76 63 324 3 31 82 and additions January - m² 881 4 286 873 38 721 137 953 389 427 131 8 934 25 128 83 54 894 2 983 563 to existing December % change -.2 6.7-24.9-1.1 6.4-5.9-2.2-14.5-13.3-1.6 houses 217 % of SA 29.5 9.6 1.3 4.6 13.1 4.4 31.3 4.3 1.8 1. Segment Period Variable WC EC NC FS KZN NW GAU MPU LIM SA New houses Jan-Dec 16 Number 4 679 1 213 5 347 225 441 7 49 1 8 154 15 562 (<8m²) January - Number 5 74 412 2 228 129 352 6 736 592 644 14 169 December % change 8.4-66. -6. -34.3-42.7-2.2-1.1-41.3 318.2-9. 217 % of SA 35.8 2.9. 1.6.9 2.5 47.5 4.2 4.5 1. New houses Jan-Dec 16 Number 3 499 697 92 316 77 1 11 4 61 872 277 12 234 (>8m²) January - Number 3 896 588 55 194 828 77 3 752 485 239 1 87 December % change 11.3-15.6-4.2-38.6 7.5-3.6-18.5-44.4-13.7-11.7 217 % of SA 36.1 5.4.5 1.8 7.7 7.1 34.7 4.5 2.2 1. New flats Jan-Dec 16 Number 4 35 373 5 1 38 762 635 5 833 176 262 13 731 and January - Number 3 86 83 17 584 1 372 416 7 26 49 155 14 48 townhouses December % change -11.6-77.7 24. -57.7 8.1-34.5 23.5 132.4-4.8 2.3 217 % of SA 27.1.6.1 4.2 9.8 3. 51.3 2.9 1.1 1. Total new Jan-Dec 16 Number 12 483 2 283 12 2 43 1 757 2 186 17 924 2 56 693 41 527 houses, January - Number 12 776 1 83 74 1 6 2 329 1 538 17 694 1 486 1 38 39 24 flats and December % change 2.3-52.6-27.5-5.8 32.6-29.6-1.3-27.7 49.8-6. townhouses 217 % of SA 32.7 2.8.2 2.6 6. 3.9 45.3 3.8 2.7 1. Alterations Jan-Dec 16 m² 543 63 61 679 38 762 33 872 137 488 69 3 258 151 77 191 6 81 1 225 317 and additions January - m² 573 759 91 282 18 437 38 8 127 75 32 827 258 531 28 797 3 979 1 173 37 to existing December % change 5.7 48. -52.4 12.2-7.1-52.4.1-62.7-34.6-4.2 houses 217 % of SA 48.9 7.8 1.6 3.2 1.9 2.8 22. 2.5.3 1. Residential building activity by province 1 Building cost of new housing constructed 1 Period Houses of <8m² Houses of 8m² Flats and tow nhouses Total Rand per m² y/y% change Rand per m² y/y% change Rand per m² y/y% change Rand per m² y/y% change 28 2 115 11.4 3 589 7.4 3 936 13.7 3 521 1.2 29 2 112 -.1 3 984 11. 4 313 9.6 3 781 7.4 21 2 192 3.8 4 421 11. 4 736 9.8 4 112 8.8 211 2 535 15.6 4 821 9. 4 863 2.7 4 387 6.7 212 2 589 2.1 5 196 7.8 5 294 8.9 4 729 7.8 213 2 864 1.6 5 565 7.1 5 913 11.7 5 25 1. 214 3 62 26.4 6 145 1.4 6 59 1.1 5 825 11.9 215 3 869 6.9 6 383 3.9 7 213 1.8 6 185 6.2 216 4 436 14.7 6 684 4.7 7 663 6.2 6 617 7. 217 4 814 8.5 7 163 7.2 8 232 7.4 7 151 8.1 Home Loans 6
Rand 9 Average building cost per m² of new housing constructed 8 7 6 5 4 3 2 1 All housing Houses <8m² Houses 8m² Flats & townhouses 12 Growth in average building cost per m² of new housing constructed 1 8 % 6 4 2 Home Loans 7
Alterations and additions to existing houses 1 Period Building area Value Building cost per m² m² y/y % change Rand million) y/y % change Rand y/y % change 28 4 81 631-2.3 14 882-11.4 3 646 11.2 29 3 318 14-18.7 13 619-8.5 4 14 12.6 21 3 443 686 3.8 15 389 13. 4 469 8.9 211 3 16 212-8.2 15 112-1.8 4 782 7. 212 3 125 614-1.1 15 869 5. 5 77 6.2 213 3 143 857.6 16 773 5.7 5 335 5.1 214 3 199 38 1.8 18 274 8.9 5 712 7.1 215 3 135 463-2. 19 151 4.8 6 18 6.9 216 3 31 82-3.3 2 93 4.9 6 627 8.5 217 2 983 563-1.6 21 167 5.3 7 94 7. 28 2 233 737 9.2 7 255 18.4 3 248 8.3 29 2 311 557 3.5 8 418 16. 3 641 12.1 21 1 811 174-21.6 7 392-12.2 4 81 12.1 211 1 762 67-2.7 7 871 6.5 4 465 9.4 212 1 466 959-16.8 6 868-12.7 4 682 4.8 213 1 722 368 17.4 8 228 19.8 4 777 2. 214 1 12 747-34.9 6 13-25.5 5 47 14.5 215 1 16 751 3.6 6 453 5.3 5 559 1.6 216 1 225 317 5.6 7 253 12.4 5 919 6.5 217 1 173 37-4.2 7 72 6.2 6 564 1.9 45 Alterations and additions to existing houses Total square metres 4 35 3 25 2 15 1 5 Plans approved Completed Home Loans 8
2 Growth in alterations and additions to existing houses Total square metres 1 % -1-2 -3-4 Plans approved Completed Rand per m² 7 Building cost of completed alterations and additions to existing houses 6 5 4 3 2 1 16 Growth in building cost of completed alterations and additions to existing houses 14 12 1 % 8 6 4 2 Home Loans 9