1. Update of Stats SA Building Statistics Dr Johan Snyman Medium-Term Forecasting Associates STELLENBOSCH 20 January 2012 MEDIUM-TERM FORECASTING ASSOCIATES Building EconomistsTel: (021) 881-3887 PO Box 7119Fax: (021) 881-3887 STELLENBOSCH, 7599 E-mail: mfa@iafrica.com

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

3. 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

4. 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

5. 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 …

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

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

8. In terms of square metres, dwelling houses are moving sideways

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

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

11. The building cost of townhouses and flats is currently about R508 000 per unit

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

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

14. … despite higher office vacancy levels (vacancies line inverted)

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

16. It seems that the industrial sector is recovering

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

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

19. This comparison shows the relative performance of the various market segments since 1987. Long-term trends seem to suggest a bottoming out of the downward movements

20. 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)

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

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

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

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

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

26. Thank you for your attention … Johan Snyman mfa@iafrica.com