Housing market declines

2008-08-20 00:00

Johannesburg — Economists say the housing market is likely to endure further pressure into 2009, after Statistics SA data revealed a year-on-year decline of recorded building plans passed.

Yesterday, the data showed that the real (after-inflation) value of recorded building plans passed by larger municipalities (at constant 2000 prices) during January to June 2008 decreased by 10%, or R2,3 billion, compared with January to June 2007.

“This is an indication that the market has contracted, and it squares with the average 30% to 40% decline in successful mortgage applications among banks from a year ago,” said Standard Bank economist Goolam Ballim.

Decreases were also reported for residential buildings, which were down 18,7% or R2,4 billion, and additions and alterations, 5,1% lower at R300,2 million.

However, an increase of 9,6%, or R417, million, was reported for non-residential buildings.

Economists said the data reflect how financially strained consumers are. In addition, many building plans have been delayed due to the problems at Eskom earlier this year.

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