Residential building statistics for 2007 confirm the slowdown in the housing market over the past twelve months, according to Absa, who today reported that the real value of residential buildings completed increased by only 0,4% from R17,63 billion (at constant 2000 prices) in 2006 to R17,71 billion in 2007, whereas the real value of building plans approved dropped by 4,4% from R26,17 billion in 2006 to R25,03 billion in 2007.
The volume of new residential buildings completed increased by 7,3% to 75 137 last year, largely driven by an annual increase of 12,8% in the completion of flats and townhouses. However, Absa says, it must be noted that the affordability of housing, which has been under further pressure during the past year, has probably caused homebuyers to shift their focus to higher-density and more affordable housing such as flats and townhouses.
The growth in the number of building plans approved for new residential building units declined by 3% in 2007, with only the flat and townhouse segment recording some growth (1,3%). Growth in plans approved has been on a declining trend since 2005, which is a reflection of a housing market which peaked in 2004.
The 2007 trend in respect of plans approved is expected by Absa to lead to a lower level of construction activity in 2008, especially with regard to multi-unit developments such as flats and townhouses which normally take some time to be completed.
On a regional front, residential building activity was dominated by Gauteng (33 885 units, or 45,1% of the national total of 75 137 units completed), followed by the Western Cape (19 271 units, or 25,6%), KwaZulu-Natal (5 370 units, or 7,1%), North West (5 295 units, or 7%), the Eastern Cape (4 466 units, or 5,9%), the Free State (2 458 units, or 3,3%), Mpumalanga (2 437 units, or 3,2%), Limpopo (1 294 units, or 1,7%), and the Northern Cape (661 units, or 0,9%).
Residential building plans approved came to 48 821 units in Gauteng in 2007 (48,5% of the national total of 100 783 units), followed by 17 274 (17,1%) in the Western Cape, 9 327 (9,3%) in KwaZulu-Natal, 6 007 (6%) in North West, 5 822 (5,8) in Mpumalanga, 4 809 (4,8%) in the Free State, 4 708 (4,7%) in the Eastern Cape, 3 319 (3,3%) in Limpopo, and 596 (0,6%) in the Northern Cape.
In terms of the annual growth in the number of residential housing units completed and in the planning phase, the smaller regions such as the Free State, Northern Cape, North West, Mpumalanga and Limpopo performed well in 2007. This, according to Absa, was probably the result of these regions coming off a lower base, with their property cycles having lagged those of the major regions such as Gauteng, the Western Cape and KwaZulu-Natal.