FNB: Residential building and construction activity remains under pressure

Residential building statistics released by Statistics South Africa for the period January-July 2008 indicate that activity in the home building sector are still under severe pressure, despite some improvement with regard to building plans approved in July compared with June.

In the first seven months of 2008 the real value of building plans approved by local government institutions for new residential buildings was 18,6% year-on-year (y/y) lower at R12,61 billion, which was R2,88 billion less than the R15,49 billion recorded in the same period last year. All real values are at constant 2000 prices.

In volume terms residential building plans approved for the three major segments of the market (houses of <80m©÷, houses of ¡Ã80m©÷ and flats and townhouses) dropped by 19,8% y/y to 50 236 units in January-July 2008 compared with 62 634 in the same period last year. The markedly lower number of plans approved for new housing in the first seven months of the year compared with a year ago will result in a lower number of units constructed in the rest of 2008 and into 2009.

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