A new house will cost you 30% more to build than existing stock
What this means is it is increasingly difficult for the new development sector to bring competitively priced new stock to market.
This is clearly evident following the release of the number of residential square metres completed being 1,391,000 m² for the three months to November 2016; this is well down on the height of the building boom in the three months to December 2005 when 2,706,000 m² were completed.
In the shorter term, residential square metres completed declined -2.1% year-on-year for the three months to November 2016, from +0.7% year-on-year growth for the three months to October 2016.
“While the currently moderate level of building activity is not great news for the development sector, it remains crucial to maintaining a reasonable balance between demand and supply in the residential market at a time of weak demand and a weak economy,” said John Loos, FNB’s household sector strategist.
+2.92% – average growth for square metres of residential plans passed year-on-year for the three months to November
+0.6% – average growth in the number of residential units completed year-on-year for the three months to November