Update of Stats SA Building Statistics Dr Johan Snyman Medium-Term Forecasting Associates STELLENBOSCH 20 January 2012 MEDIUM-TERM FORECASTING ASSOCIATES Building EconomistsTel: (021) PO Box 7119Fax: (021) STELLENBOSCH,

Vehicle sales show a V-shaped recovery, with a U-shaped revival in the case of residential buildings

The trend in the cyclical movements correspond closely; vehicle sales are almost 17% higher than a year ago, with residential only 1% higher. This indicates a much weaker revival in the case of dwelling houses, flats and townhouses

Two blows struck the private housing industry in 2007/08 … and the recession was severe. The year-on-year improvement in the annual percentage change of the number of houses (left-hand scale) is currently only 3.3%, pointing to a modest revival

The mortgage rate is an important factor influencing the demand for housing. In the past, lower interest rates have boosted housing demand levels. During the current cycle, lower interest rates had little positive effect, because …

… the availability of housing finance was curtailed by the National Credit Act that was implemented in July 2007

In terms of numbers, private house plans approved are slowly improving

In terms of square metres, dwelling houses are moving sideways

Data of townhouses and flats also show signs of a U-shaped revival

Up till recently, there seems to be a gradual improvement in the sizes of townhouses and flats. Now this indicator is dropping once again

The building cost of townhouses and flats is currently about R per unit

A sideways trend is evident in the case of residential renovations data

It seems as if the lower turning point in offices has been recorded …

… despite higher office vacancy levels (vacancies line inverted)

Since the low point recorded in April 2011, only a marginal improvement is evident

It seems that the industrial sector is recovering

… nevertheless, industrial vacancies remain relatively high (vacancies line inverted, right-hand scale)

Still in the doldrums … with a slight rise in the residential sector being negated by a weaker non-residential sector

This comparison shows the relative performance of the various market segments since Long-term trends seem to suggest a bottoming out of the downward movements

This comparison of long term trends shows the lagged pattern (residential is forming a trough, whilst it seems as if the non- residential sector is also approaching a trough – compare the cyclical movements in 1993)

Building Plans Passed has bottomed out, and the lagging Buildings Completed time series is nearing a trough

The BPP indicator is improving, but the lagging BC series could fall further

A haphazard sideways movement is evident, with both indicators sliding downward

Total BPP and BC seem to be in the initial stages of forming a trough, i.e. the movement is sideways in both cases

Cement sales is about 6% higher than a year ago, with the average of BPP & BC just about on the zero line

Thank you for your attention … Johan Snyman