Building activity in the South African market for new private sector-financed housing (see explanatory notes) remained under pressure in both the planning and construction phases in the first eight months of 2017, based on data released by Statistics South Africa.
The volume of building plans approved for new housing contracted by 0,9% year-on-year (y/y), or 349 plans, to a total of 36 469 plans in the period of January to August this year. Whereas the number of plans approved for new houses smaller than 80m² increased by 7,3% y/y in the 8month period, plans approved in the segments for houses equal to or larger than 80m² and flats and townhouses contracted by 4,4% y/y and 5,3% y/y respectively since the start of the year.
The construction phase saw the number of new housing units reported as being completed rising by a largely subdued 1,1% y/y, or only 285 units, to 25 889 units in January to August this year. The segment for houses of 80m² and larger showed a contraction of 17% y/y, or 1 350 units, to a total of 6 582 units over this period, which contributed to the total building area of homes completed in this category declining by 9% y/y. The other two segments of housing recorded combined positive growth of 9,3% y/y in the construction phase over the eight months up to August.
The building area in respect of alterations and additions to existing houses declined in both the planning and construction phases in the period of January to August this year, largely as a result of many homeowners continuing to experience some financial strain.
The real value of residential buildings planned was down by 6,2% y/y, or R2,06 billion, to R31,18 billion in the eight months up to August. However, the real value of residential buildings reported as completed in this period increased by 11,9% y/y, or R2,35 billion, to R22,01 billion. These real values were calculated at constant 2015 prices.
The first eight months of 2017 saw the average building cost of new housing increasing by 9,1% y/y to an average of R7 055 per square meter, compared with R6 469 per square meter in the corresponding period last year. In real terms, i.e. after adjustment for inflation, building costs increased by 3,4% y/y, based on headline consumer price inflation that averaged 5,5% y/y over the 8-month period. The average building cost per square meter in the three categories of new housing was as follows in January to August: