Steady improvement in property values towords end of 2009

The value of South African recorded building plans passed at constant 2000 prices in May decreased 36.2% year on year from a revised increase of 14.4% (11.6%) in April, Statistics South Africa (Stats SA) data showed.

A decline of 19.6% year-on-year had been recorded in March.

Residential building plans were the main reason for the turnaround as they fell drastically to 45.6% from 3.3% in April.

Additions and alterations also fell markedly to 31.7% from 2.9% in April, while non-residential building plans passed fell 14.3% from a previous 90.2% increase.

The value of building plans reported as completed to larger municipalities at constant prices fell 27.9% year-on-year from a previous increase of 2.1%.

Building activity has come under a significant amount of pressure this year due to slowing housing demand and electricity shortages, as well as delays in plans passed.

Stats SA noted that despite a considerable drop in the value of building plans passed during May 2008, the value of recorded building plans passed by larger municipalities at current prices during January to May 2008 rose by 3.3% compared with January to May 2007.

The largest increase was reported for non-residential buildings (33.1% or 1,986.9 million rand), mainly due to more plans passed for shopping space (103.7% or 1,538.7 million) and office and banking space (28.5% or 438.1 million rand).

The largest increase for shopping space was recorded for Gauteng (654.6 million rand, followed by KwaZulu-Natal (373.0 million), Mpumalanga (293.2 million, and Eastern Cape (210.8 million rand).

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