Nominal value of residential building plans almost double
The value of recorded residential building plans passed increased by 91.2% during January to June 2021 compared with January to June 2020.
GRAPHIC: Amber Dawson
This is according to the latest P5041.1 statistical release from StatsSA. This report researches information from a sample of local government institutions involved in the approval of building plans for the private sector.
Alternatively, the January to June 2021 period saw a nominal increase in R13.75 billion of value in residential property compared to January to June 2020. From January to June 2020, residential buildings were valued at R15.1 billion compared to the R28.84 billion reported for January to June 2021.
“The value of recorded building plans passed (at current prices) increased by 74.2% during January to June 2021 compared with January to June 2020,” the report mentioned in reference to both residential and non-residential buildings.
StatsSA also provided a comprehensive breakdown of the value of property per month. The percentage change is comparable between the same month of the current and previous year. TABLE: StatsSA.
Meanwhile, StatsSA file their research on residential property into three categories. This includes dwelling houses, flats and townhouses, and other residential buildings which comprise hotels, hostels, and other accommodation.
Dwelling houses saw the biggest percentage change between the periods of January to June 2020 to January to June 2021. Its percentage change of 105.1% points was greater than flats and townhouses at 72.9% and other residential buildings at 97.6%.
Approved residential building plans also increased at a real value of 75.5% over the same two periods.
Meanwhile, on a provincial level, the value of recorded residential building plans passed in the Western Cape increased by 70.1% during January to June 2021 compared with January to June 2020.
Gauteng recorded a greater increase in value which stood at 86.4%.
Urbanisation has resulted in the upward demand for residential buildings.
This is according to Sean Johnston, general manager of property portfolio planning at IGrow Wealth Investments.
“More people are locating to new areas. Areas where there is an economic stimulus for more job opportunities,” he explained.
As a result, buy-to-let property investors need to still do further research into particular urban areas to find their ideal location according to Johnston.
“It is important to understand which areas and types of properties will have the highest rental demand. More importantly, how sustainable the rental income will be over the medium to long term,” he said.