Data provided by iNet BFA
Loading...
See More

Building costs strengthen home prices

Aug 23 2012 16:59 Sapa

Related Articles

City centre revival

Landlord wants R30m rent from govt

Authorities scare off developers

Student accommodation ripe for listing

Elderly squeezed because of investments

Pinnacle Point applies for JSE suspension

 

Johannesburg - Rising building costs are pushing property prices higher, estate agency Chas Everitt said on Thursday.

The cost of building a new home increased by 4.3% in the second quarter of this year, compared to the same period in 2011, the agency said, citing the Absa Housing Review.

"This put the average nominal price of a new house at R1.535m, or some 34.4% ahead of the second quarter average of R1.007m for an existing house," Chas Everitt MD Berry Everitt said in a statement.

This resulted in demand for housing being channelled away from off-plan homes and towards pre-owned properties, bolstering their prices.

Levels of residential building capacity had continued to fall off, making it more difficult to buy a newly-built home.

In the first half of the year, the number of building plans passed for new housing units dropped 11.6%, compared with the same period last year, to 23 095 units.

Most of these units would take between 18 months and two years to complete.

Although overall numbers of new homes rose by 3.4% year-on-year, or 645 units, there were significant declines in six of the nine provinces, particularly in units less than 80 square metres.

This was the category favoured by first-time buyers.

"The main reason for this decline is rising building costs, which at the moment are preventing developers from being able to deliver new homes at competitive prices, and in many cases causing them to abandon their plans altogether," Everitt said.

Building costs rose by 5.7% in the first quarter of 2012.

The industry had to contend with increases in the cost of labour, transportation and electricity.

Overall building costs were expected to rise by 12.1% this year, and 16.3% next year, according to the Bureau for Economic Research.

*Follow Fin24 on Twitter, Facebook and Google+.

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

Where can you stash your cash?

Fin24 user Tinashe Guramatunhu presents a review of the best way to invest a windfall or bonus.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...