Housing in Southern Africa October 2015

Housing

Turbulent times for Nelson Mandela Bay TheDemocratic Alliance’sMayoral Candidate for NelsonMandela Bay Athol Trollip recently lashed out at Danny Jordaan, for being only a part-time mayor of the metro. Jordaan had promised to modernise the administration and grow the local economy.

A ccording to Trollip the metro has the highest water loss in South Africa with burst pipes and wastage accounting for R327 million or 36% water loss. Insteadof growing the local econo- my, Jordaanhas kept themetroout of benefitting from the Coega Industrial Development Zone. “Jordaan has protected those who unlawfully and improperly hand out tenders, bungle contracts and accept trips to other provinces withmunicipal tender bid- ders,” says Trollip. He says that instead of cutting costs on non-core expenditure Jordaan decided to cut ‘special skills allowances’ to critical officials in the electricity and water director- ates. This has caused a wildcat strike and power outages in areas of the North and also resulted inwater cuts. “There is a housing backlog of 38 000 units andwith plans to complete only 1 293 houses this year, communities are unimpressed. According to Stats- SA, over 80% of residents in Nelson Mandela Bay are afraid to go out after dark because of the crime rate – the highest of any metro.” Trollip comments, “Possibly his greatest failing is the continued rot of the IPTS bus system and after buy- ing buses, there is now a proposal to sell the IPTS. This will represent a R2 billion loss for the metro.” A ccording to Statistics South Africa, growth in activity levels in the planning and construc- tion phases of new housing was largely segment driven till July. Jacques du Toit, Property Analyst Absa Home Loans, says that the number of new housing units for which building plans were approved improved by 5%year-on-year (y/y) to more than 35 000 units since Janu- ary, with strong growth of 15,5% y/y recorded in the category of flats and townhouses. Growth in the number of newhousing units constructedwas recorded at 6,3% y/y, with a total of almost 22 000 units built in the seven months up to July. This growth was largely the result of a relatively strong

But Trollip is confident that things will change as the DA aims to intro- duce job zones, an entrepreneurship centre as well as establish infra- structure detection and monitoring systems. Trollip plans to launch

independent forensic audits of all wrongdoing and will work with other metros that have efficient Bus Rapid Transport systems, to formally launch the Nelson Mandela Bay IPTS based on the best working model. ■

Strong growth in residential building improvement in new houses to the tune of 19% y/y, or a total of 15 951 units. The number of new flats and townhouses built was down by 17,3% y/y in the seven-month period, but with these housing developments it takes time to complete construc- tion. The double-digit growth in the residential planning will probably be reflected in the construction phase at a much later stage. • Houses of <80m²: R3 884, an in- crease of 12,8% y/y. • Houses of ≥80m²: R6 293, a hike of 4,8% y/y. • Flats and townhouses: R6 864, cost 8,4%more y/y.

“There is a significant lag between the planning and eventual comple- tion of units because of the rezon- ing process, construction phases, preparation of development land, availability of municipal services and infrastructure such as water, sewerage and electricity. Also the outlook for the economy, household finances and consumer and building confidence are also key drivers of residential building activity.” ■

The average cost per m² of new housing averaged R6 014 in the first sevenmonths of 2015. This was 5,3% higher than in the corresponding period last year. Building costs per m² in the vari- ous housing segments from January to July cost:

October 2015