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