Over the years, growth in the volume of construction activities in South Africa for market for new housing remained in the low single digits in the first two months of 2016.
These new developments are based on data published by Statistics South Africa highlighting building activity in relation to private sector-financed housing.
From January to February this year the number of new housing units with approved building plans increased by 3,2% year-on-year (y/y), or 271 units, to 8 806 units over the two-month period. The construction sector saw the number of new housing units built increase by 28,1% y/y, or 1 443 units, to 6 575 units in the first two months of the year.
However, this growth was as a result of strong growth in the sector of flats and townhouses. The number of town houses and flats built increased by close to 122% y/y, or 1 507 units, to a total of 2 739 units in January and February.
The exponential increase in housing units built in this sector of the market compared with a year ago may be attributed to reporting trends.
The real value of approved plans for new residential buildings dropped by 2% y/y, or US$7.9 billion, to US$380.8 million in the two months up to February. The real value of residential buildings completed increased by 15,9% y/y, or US$34 million, to a cumulative value of US$249.2 million in January and February this year. These real values are computed at constant 2010 prices.
Averagely, the cost of new housing constructed over the same period came to US$443 per square metre in the first two months of the year, which represents 8,7% higher than the average cost of US$407.8 per square metre the previous year.
It is projected that the economy of South Africa will experience turbulent times in 2016, with growth prediction at a much subdued 0,6%, while inflation and interest rates are expected to rise up
