PUBLISHED 29 NOV 2009
Residential construction
The pressure on the residential construction sector is still very visible in the latest StatsSA building numbers, which show that in the year to end-September, the number of new residential units completed fell by 34.8%, compared with the previous 12 months.
This was substantially down on the 19.3% year-on-year decline recorded at the end of June but is in line with the severe decline in building plans being passed since 2008. Indeed, in the year to end-September, the number of plans passed for new residential units was 49,4% down on the previous 12 months.
However, says FNB property analyst John Loos, there are now tentative signs of an improving climate for residential builders, including lower input cost inflation and slowly rising existing house prices. The producer price index for building materials went into decline in September for the first time in a decade (compared to a peak inflation rate of 18,4% as recently as November last year.
Meanwhile, stand and home sizes are steadily being reduced to improve affordability. The average stand size for new homes has declined from 1068sqm in the mid-Seventies to around 555sqm now, and the average house size has declined from a peak of 203sqm in the mid-Seventies to 160sqm.
Source: Property Trader
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