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Johannesburg - Building activity for new housing showed significant growth with regard to the planning phase in the first month of 2014 compared with a year ago, according to Jacques du Toit, property analyst at Absa Home Loans.
The construction phase has, however, contracted in January from its level of activity in the same month last year.
The number of new housing units for which building plans were approved, increased markedly by 46.7% year-on-year (y/y) to 4 765 units in January 2014.
This growth was largely driven by the segments of houses less than 80m² and flats and townhouses, recording strong growth of 74.3% y/y and 64.9% y/y respectively.
These two segments of the market comprised 73.7% of the total number of plans approved regarding new housing in January.
At a regional level the volume of plans approved in respect of new housing showed strong year-on-year growth in Gauteng, the Free State and Mpumalanga.
The level of activity in the construction phase of new housing, that is the number of new units reported as completed, dropped by 18,3% y/y to 2 256 units in January from 2 760 units in January last year.
This poor showing with regard to new housing built was the result of significant contractions in the segments of houses less than 80m² (-20.4% y/y) and flats and townhouses (-37.2% y/y).
Provincial outlook
Seven of the nine provinces recorded a drop in the number of new housing units built in January compared with a year ago.
The average building cost of new housing constructed came to R5 586 per square metre in January 2014, which was up by 15.6% from R4 831 per square metre in the corresponding month last year, when building costs rose by 14.8% y/y.
Building costs are affected by factors such as building material costs, labour costs, transport costs, equipment costs, land values, rezoning costs where applicable, and developer and contractor holding costs and profit margins.
The first month of 2014 saw the real value of plans approved for new residential buildings rising by 36.9% y/y, or R756.56 million to R2.65bn from R1.9bn a year ago.
The real value of residential buildings reported as completed increased by 7.1% y/y, or R103.94m, to R1.58bn in January from R1.47bn twelve months ago.
These higher real values of residential building activity are related to above-inflation building cost increases.
"Building confidence rose in the first quarter of 2014 to its highest level since the third quarter of 2008, mainly affected by continued growth in non-residential building activity," said Du Toit.
"Residential building activity will in 2014 continue to be affected by economic trends, household finances, property-investment sentiment and consumer confidence in general."
The construction phase has, however, contracted in January from its level of activity in the same month last year.
The number of new housing units for which building plans were approved, increased markedly by 46.7% year-on-year (y/y) to 4 765 units in January 2014.
This growth was largely driven by the segments of houses less than 80m² and flats and townhouses, recording strong growth of 74.3% y/y and 64.9% y/y respectively.
These two segments of the market comprised 73.7% of the total number of plans approved regarding new housing in January.
At a regional level the volume of plans approved in respect of new housing showed strong year-on-year growth in Gauteng, the Free State and Mpumalanga.
The level of activity in the construction phase of new housing, that is the number of new units reported as completed, dropped by 18,3% y/y to 2 256 units in January from 2 760 units in January last year.
This poor showing with regard to new housing built was the result of significant contractions in the segments of houses less than 80m² (-20.4% y/y) and flats and townhouses (-37.2% y/y).
Provincial outlook
Seven of the nine provinces recorded a drop in the number of new housing units built in January compared with a year ago.
The average building cost of new housing constructed came to R5 586 per square metre in January 2014, which was up by 15.6% from R4 831 per square metre in the corresponding month last year, when building costs rose by 14.8% y/y.
Building costs are affected by factors such as building material costs, labour costs, transport costs, equipment costs, land values, rezoning costs where applicable, and developer and contractor holding costs and profit margins.
The first month of 2014 saw the real value of plans approved for new residential buildings rising by 36.9% y/y, or R756.56 million to R2.65bn from R1.9bn a year ago.
The real value of residential buildings reported as completed increased by 7.1% y/y, or R103.94m, to R1.58bn in January from R1.47bn twelve months ago.
These higher real values of residential building activity are related to above-inflation building cost increases.
"Building confidence rose in the first quarter of 2014 to its highest level since the third quarter of 2008, mainly affected by continued growth in non-residential building activity," said Du Toit.
"Residential building activity will in 2014 continue to be affected by economic trends, household finances, property-investment sentiment and consumer confidence in general."
