Local builders taking strain
The residential property market has taken a knock as consumer spending dwindled due to the global financial crisis.
The number of residential building plans approved between January and November last year declined by 17,8percent year on year as the property market continued to take strain.
Jacques du Toit, property and vehicle markets analyst at Absa, said housing construction was expected to decline further on the back of lower demand and a bleak economic outlook for this year.
The latest figures from Statistics South Africa show a continued slowdown in residential property activity with only 77998 building plans - valued at R17.85billion - approved by local authorities between January and November last year .
Jacques du Toit, property and vehicle markets analyst at Absa, said this figure was 25,5% down year-on-year, compared with R23,98billion recorded for the same period in 2007.
He said this was evidence of the strain that the property market had to deal with last year, as demand fell drastically due to the negative impact of increased energy prices, high interest rates and inflation on household income.
The number of residential buildings completed also showed a decline of 8,9percent to 64 473 units - valued at R14,83billion - compared with 70766 units the previous year, at a total value of R16.38billion.
Du Toit said Gauteng showed a decline of 25,0percent in approved building plans year on year, while the Western and Eastern Cape both registered positive year-on-year growth of 3,1percent and 4,9percent respectively.
Makwe Masilela, analyst at Nehawu Securities, said the depression in the property market was also reflected in the poor performance of construction stocks on the JSE.
Aveng is down to R26,35 from R51,15 last January, while Murray & Roberts is trading at R43,50 from R88. Wilson Bayly Holmes-Ovcon has dropped from R112 to R99. Pretoria Portland Cement has also shed R11,50 to R27,95 from R39,50 last January.