prospects for building & construction & property bmi forum 2010.01 dr johan snyman...
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MEDIUM-TERM FORECASTING ASSOCIATES Building Economists Tel: (021) 883-8152 PO Box 7119 Fax: (021) 887-1597 STELLENBOSCH, 7599 E-mail: [email protected]
Prospects for Building & Construction & Property
BMI Forum 2010.01
Dr Johan Snyman
Medium-Term Forecasting Associates
STELLENBOSCH
24 March 2010
Framework
Leading indicators
Quantitative
Qualitative
Market sectors
Residential
Non-residential
Construction works
Property indicators
Summary
COMPARISON: GDP GROWTH in BUSINESS CYCLE UPSWING PHASESMeasured in quarters
100
105
110
115
120
125
130
135
140
145
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Source: SARB; MFA DATABASE
IND
EX
100
= S
tart
of
up
swin
g p
has
e
99-'07 78-81 86-89 93-96 09-?
78-81"GOLD"
99-'07
93-96
86-89
2009 - ? Growth phase 100.8, same as 93-96, slower than 99-2007
SARB LEADING INDICATOR OVERALL ECONOMY
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
| 62 | 65 | 68 | 71 | 74 | 77 | 80 | 83 | 86 | 89 | 92 | 95 | 98 | 01 | 04 | 07 | 10
Source: SARB; MFA DATABASE (Economic Upswings Shaded)
IND
EX
2000
=100
COMPARISON TOTAL VEHICLE SALES & TOTAL REAL RESIDENTIAL PLANS PASSED INDEX 1970 = 100
0
50
100
150
200
250
300
350
|70 |71 |72 |73 |74 |75 |76 |77 |78 |79 |80 |81 |82 |83 |84 |85 |86 |87 |88 |89 |90 |91 |92 |93 |94 |95 |96 |97 |98 |99 |20 |01 |02 |03 |04 |05 |06 |07 |08 |09 |10 |
Source: NAAMSA; Stats SA; SARB; MFA DATABASE
IND
EX
197
0 =
100
TOTAL VEHICLE SALES TOTAL REAL RESIDENTIAL BPP
TOTAL VEHICLE SALES & TOTAL REAL RESIDENTIAL PLANS PASSED ANNUAL PERCENTAGE CHANGE
-60
-40
-20
0
20
40
60
80
100
| 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: NAAMSA; STATS SA; SARB, MFA DATABASE
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
TOTAL VEHICLE SALES TOTAL RESIDENTIAL BPP
Shaded areas represent theupswing phases of the business cycle
CONSUMER CONFIDENCE: NATION BUILDING BLACK & WHITE CONSUMERS
50
60
70
80
90
100
110
120
130
140
150
| 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: FNB / BER; MFA DATABASE
PE
SS
IMIS
M <
100
> O
PT
IMIS
M
WHITE BLACK (BUSINESS CYCLE UPSWINGS SHADED)
ASIAN CRISIS
GOLDBOOM
RUBICON
DEMOCRATIC ELECTIONS
PETROLPRICEHIKES& JOBLOSSES
SOCCERWORLDCUPBID
GLOBALFINANCIALCRISIS
Consumers are recovering from the global financial crisis …
The MFA CLIBI is conforming to pattern, remember it leads the cycle …
MFA COMPOSITE LEADING INDICATOR FOR THE SOUTH AFRICAN BUILDING INDUSTRY
0
10
20
30
40
50
60
70
80
90
100
| 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: FNB / BER; SARB; MFA DATABASE
PE
SS
IMIS
M <
50
> O
PTI
MIS
M
OPTIMISM
PESSIMISM
The business mood of builders and architects has turned the corner, yet quantity surveyors are more pessimistic than before…
ARCHITECTS, QUANTITY SURVEYORS & BUILDING CONTRACTORS BUSINESS MOOD
0
10
20
30
40
50
60
70
80
90
100
| 72 | 77 | 82 | 87 | 92 | 97 | 02 | 07 |
Source: FNB / BER; MFA DATABASE
PE
SS
IMIS
M <
50
> O
PT
IMIS
M
Contractors Architects Quantity Surveyors
OPTIMISM
PESSIMISM
The business mood of non-residential builders lags that of residential builders … but both indicators are improving
COMPARISON RESIDENTIAL & NON-RESIDENTIAL CONTRACTORS BUSINESS MOOD
0
10
20
30
40
50
60
70
80
90
100
| 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: FNB / BER; SARB; MFA DATABASE
PE
SS
IMIS
M
>
50
<
O
PT
IMIS
M
RES CONTRACTORS NON-RES CONTRACTORS
OPTIMISM
PESSIMISM
Labour and materials bottlenecks are easing …
LABOUR & MATERIALS SHORTAGES
0
10
20
30
40
50
60
70
80
90
100
| 72 | 77 | 82 | 87 | 92 | 97 | 02 | 07 |
Source: FNB / BER; SARB; MFA DATABASE
LE
SS
SE
VE
RE
BO
TT
LE
NE
CK
S /
SE
VE
RE
BO
TT
LE
NE
CK
S
Materials Labour
Competition in tendering is still quite keen …
THE DEGREE OF COMPETITION IN TENDERING BUILDING CONTRACTORS
0
10
20
30
40
50
60
70
80
90
100
| 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: FNB / BER; MFA DATABASE
LE
SS
KE
EN
<
50
% >
VE
RY
KE
EN
The number of tenderers on the tender list is rising strongly, implying less work available … and this finding comports with keen competition …
AVERAGE NUMBER OF TENDERS RECEIVED PER BUILDING PROJECT
0
2
4
6
8
10
12
| 72 | 77 | 82 | 87 | 92 | 97 | 02 | 07 |
Source: BER; MFA DATABASE
NU
MB
ER
OF
TE
ND
ER
S P
ER
PR
OJ
EC
T
TRENDBREAK
ONLY 3 TENDERERS ON AVERAGE in 2007SUDDENLY RISING TO 9
THE SHADED AREAS REPRESENT THE UPSWING PHASES OF THE BUSINESS CYCLE
BUILDING BOOM
Builders’ merchants view their stock levels as still too high, but less adequate than previously. They will probably start a restocking cycle during 2010 …
BUILDERS' MERCHANTS STOCK LEVELSIN RELATION TO EXPECTED DEMAND
0
10
20
30
40
50
60
70
80
90
100
| 72 | 77 | 82 | 87 | 92 | 97 | 02 | 07 |
Source: FNB / BER; MFA DATABASE
ST
OC
KIN
G U
P <
50
> D
ES
TO
CK
ING
PRIME RATE COMPARED TO BPP NUMBER OF HOUSES (>80m²) BPP ANNUAL PERCENTAGE CHANGE
-60
-40
-20
0
20
40
60
80
| 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; SARB; MFA DATABASE
BP
P H
OU
SE
S A
NN
UA
L P
ER
CE
NT
AG
E
CH
AN
GE
8
10
12
14
16
18
20
22
24
26
28
PR
IME
RA
TE
(INV
ER
TE
D)
BPP NO OF HOUSES PRIME RATE
Introduction of National Credit ActMuch stricter lending criteria applied
Two blows struck the private housing industry in 2007/08 … but it seems that it is responding belatedly to lower interest rates
BUILDING LOANS GRANTED AT CONSTANT 2008 PRICES
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
| 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 00 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
MO
NT
H
SHADED AREAS REPRESENT THE UPSWING PHASES OF THE BUSINESSCYCLE GOLD
BOOM
ASIANCRISIS
NATIONALCREDIT ACT
MORTGAGE LOANS ON NEW & EXISTING BUILDINGS Rm AT CONSTANT 2008 PRICES
0
10000
20000
30000
40000
50000
| 71 | 74 | 77 | 80 | 83 | 86 | 89 | 92 | 95 | 98 | 01 | 04 | 07 | 10
Source: SARB; MFA DATABASE
AT
CO
NS
TA
NT
20
08
PR
ICE
S (
Rm
)
GOLDBOOM
PROPERTYBOOM
NATIONALCREDITACT
ASIAN CRISISPRIME AT 25,5%BUILDING LOANS
MORTGAGESON EXISTING BUILDINGS
PROPERTYBOOM
MORTGAGES GRANTED ON VACANT LAND SMOOTHED, AT CONSTANT 2008 PRICES
0
500
1000
1500
2000
2500
3000
3500
4000
4500
| 74 | 77 | 80 | 83 | 86 | 89 | 92 | 95 | 98 | 01 | 04 | 07 | 10
Source: SARB; MFA DATABASE
VA
LU
E O
F M
OR
TG
AG
ES
GR
AN
TE
D A
T C
ON
ST
AN
T 2
008
PR
ICE
S R
m
GOLD BOOM
FIRST TIME HOMEBUYERS'SUBSIDYSCHEME
DEMOCRATICELECTIONS
ASIANCRISIS
NATIONALCREDITACT
Dwelling houses are still plumbing the depths …
BUILDING PLANS PASSED DWELLING HOUSES NUMBER OF SQUARE METRES
0
200000
400000
600000
800000
1000000
1200000
1400000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
NU
MB
ER
OF
SQ
UA
RE
ME
TR
ES
Townhouses and flats are also plumbing the depths of the cycle
BUILDING PLANS PASSED TOWNHOUSES AND FLATS NUMBER OF SQUARE METRES
0
100000
200000
300000
400000
500000
600000
700000
800000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
NU
MB
ER
OF
SQ
UA
RE
ME
TR
ES
Still performing poorly …
BPP: RESIDENTIAL ADDITIONS & ALTERATIONS NUMBER OF SQUARE METRES
0
200000
400000
600000
800000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA, MFA DATABASE
SQ
UA
RE
ME
TR
ES
RES ADD & ALT 13mma
AVERAGE SIZE OF TOWNHOUSES & FLATS SQUARE METRES (SMOOTHED)
0
20
40
60
80
100
120
140
160
180
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
AV
ER
AG
E S
IZE
SQ
UA
RE
ME
TR
ES
CURRENTLY DROPPING FROM 150 to 88 SQUARE METRES
There is a gradual downtrend in sizes of townhouses and flats
AVERAGE BUILDING COST OF TOWNHOUSES & FLATS RAND (DATA SMOOTHED)
0
100000
200000
300000
400000
500000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
CO
ST
IN R
AN
D
CURRENTLY ABOUT R400 000 PER UNIT(on average)
The building cost of townhouses and flats seems to have stabilised around R400 000 per unit
TOTAL HOUSING vs HOUSEHOLD INDEBTEDNESS
0
10000
20000
30000
40000
50000
60000
| 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09
Source: FNB; SARB; MFA DATABASE
Rm
AT
CO
NS
TA
NT
20
08 P
RIC
ES
20
30
40
50
60
70
80
90
HH
OL
D IN
DE
BT
ED
NE
SS
% O
F D
ISP
OS
AB
LE
IN
CO
ME
TOTAL HOUSING Rm HOUSEHOLD INDEBTEDNESS
DEBT LEVELS HAVE RISEN,BUT HAVE REACHED A PEAK
INVESTMENT IN RESIDENTIAL BLDGS AT CONSTANT 2008 PRICES 1960 to 2009 (SEASONALLY ADJUSTED QUARTERLY DATA)
0
10000
20000
30000
40000
50000
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N
TOTAL RESIDENTIAL BUILDINGS ANNUAL PERCENTAGE CHANGE 1960 - 2009 ( 3 QUARTER MOVING AVERAGE )
-30
-20
-10
0
10
20
30
40
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |
Source: SARB; MFA DATABASE (ECONOMIC UPSWINGS SHADED)
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
The demand for new office space is dropping to extremely low levels …
OFFICES BUILDING PLANS PASSED: SQUARE METRES
0
40000
80000
120000
160000
200000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
SQ
UA
RE
ME
TR
ES
3mma 13mma
… because office vacancies are rising on a nationwide basis
OFFICE VACANCIES & BUILDING PLANS PASSED OFFICES
0
50000
100000
150000
200000
| 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: SARB; Stats SA; RODE DATABASE; SAPOA; MFA DATABASE
BP
P S
QU
AR
E M
ET
RE
S (
3 M
MA
)
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
% N
AT
ION
AL
OF
FIC
E V
AC
AN
CIE
S
(IN
VE
RT
ED
)
BPP OFFICES VACANCIES
BPP
VACANCIESINVERTED(RIGHT HANDSCALE)
Definite signs of over-building …
SHOPPING SPACE BUILDING PLANS PASSED: SQUARE METRES
0
40000
80000
120000
160000
200000
240000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
SQ
UA
RE
ME
TR
ES
The downward trend is still in place …
INDUSTRIAL & WAREHOUSING BUILDING PLANS PASSED: SQUARE METRES
0
50000
100000
150000
200000
250000
300000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
SQ
UA
RE
ME
TR
ES
3mma 13mma
… because industrial vacancies are still rising …
INDUSTRIAL VACANCIES & INDUSTRIAL BUILDING PLANS PASSED
0
50000
100000
150000
200000
250000
300000
| 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: RODE; STATS SA; SARB; MFA DATABASE
IND
US
TR
IAL
BB
P S
QU
AR
E M
ET
RE
S (
3mm
a)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
HIG
HE
R
<
VA
CA
NC
Y R
AT
E
> L
OW
ER
(IN
VE
RT
ED
)
INDUSTRIAL BPP INDUSTRIAL VACANCIES
VACANCIES INVERTEDRIGHT HAND SCALE
BPP
According to Rode, industrial vacancies have risen since 2008 on a nationwide basis
… and, consequently, industrial rental levels have dropped
According to Rode, there is a close correspondence between the under-utilization in manufacturing and industrial vacancies
Still dropping …
BUILDING PLANS PASSED: NON-RESIDENTIAL ADD & ALT SQUARE METRES
0
50000
100000
150000
200000
250000
300000
350000
| 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
SQ
UA
RE
ME
TR
ES
INVESTMENT IN NON-RES BUILDINGS AT CONSTANT 2008 PRICES 1960 to 2009 (SEASONALLY ADJUSTED QUARTERLY DATA)
0
20000
40000
60000
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N
TOTAL NON-RESIDENTIAL BUILDINGS ANNUAL PERCENTAGE CHANGE 1960 - 2009 ( 3 QUARTER MOVING AVERAGE )
-30
-20
-10
0
10
20
30
40
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |
Source: SARB; MFA DATABASE (ECONOMIC UPSWINGS SHADED)
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
COMPARISON TO ILLUSTRATE THE LAG BETWEEN RESIDENTIAL & NON-RESIDENTIAL BUILDING PLANS PASSED. INDEX Jan 1987 = 100
0
50
100
150
200
250
| 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; SARB; MFA DATABASE
IND
EX
Jan
198
7 =
100
RESIDENTIAL BPP NON-RESIDENTIAL
33 MONTH LAG
18 MONTH LAG
26 MONTH LAG
30 MONTH LAG
NON-RESIDENTIAL LAGS RESIDENTIAL BY 27 MONTHS, ON AVERAGE, OR BY JUST MORE THAN 2 YEARS
INVESTMENT IN TOTAL CONSTRUCTION WORKS, 1960 to 2009 AT CONSTANT 2008 PRICES (SEAS ADJ QUARTERLY DATA)
0
30000
60000
90000
120000
150000
180000
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |
Source: SARB; MFA DATABASE
RA
ND
MIL
LIO
N
SISHEN-SALDANHARICHARDS BAY
SASOL II & III MOSSGAS TELKOM
ESKOMPOWER STATIONS
LARGE DAMS
COEGA &ACCEL-ERATEDCAPEXPROGRAM
TOTAL CONSTRUCTION WORKS ANNUAL PERCENTAGE CHANGE ( 3 QUARTER MOVING AVERAGE )
-30
-20
-10
0
10
20
30
40
50
| 61 | 64 | 67 | 70 | 73 | 76 | 79 | 82 | 85 | 88 | 91 | 94 | 97 | 20 | 03 | 06 | 09 |
Source: SARB; MFA DATABASE (ECONOMIC UPSWINGS SHADED)
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
CIVIL ENGINEERING CONTRACTORSBUSINESS CONFIDENCE
0
10
20
30
40
50
60
70
80
90
100
| 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 00 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: SAFCEC; FNB / BER; SARB; MFA DATABASE
PE
SS
IMIS
M
< 5
0 >
O
PT
IMIS
M
THE SHADED AREAS REPRESENT THE UPSWING PHASE OF THE BUSINESS CYCLE
ESKOMROADSTRANSNETGAUTRAINSOCCER CUPMEGA - PROJECTS
PESSIMISM
OPTIMISM
ABSA REAL AVERAGE HOUSE PRICES & ANNUAL PERCENTAGE CHANGE
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
| 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: Stats SA; MFA DATABASE
RE
AL
AV
ER
AG
E H
OU
SE
VA
LU
E (
RA
ND
)
-30
-20
-10
0
10
20
30
40
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
REAL HOUSE PRICES APC
TRANSFER DUTY PAID AT CURRENT PRICES
0
100
200
300
400
500
600
700
800
900
1000
| 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: DEEDS OFFICE; NATIONAL TREASURY; SARB; MFA DATABASE
RA
ND
MIL
LIO
N P
ER
MO
NT
H
In nominal terms, before the adjustments needed to ...
eliminate house price inflation …
and tranfer duty rate changes
Data released by the National Treasury show that the trough in transfer duty was recorded during 2009
TRANSFER DUTY PAID in REAL TERMS RAND MILLION AT CONSTANT 2008 PRICES
0
100
200
300
400
500
600
700
800
900
1000
| 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
SOURCE: DEEDS OFFICE; TREASURY; SARB; MFA DATABASE
Rm A
T CO
NSTA
NT 2
008
PRIC
ES
TRANSFER DUTY PAID TREND
ASIANFINANCIAL CRISIS
THE SHADED AREAS REPRESENT THE UPSWING PHASES OF THE BUSINESS CYCLE
DEMOCRATIC ELECTIONS
PROPERTYBOOM
Transfer duty is improving in real terms from very low levels
TRANSFER DUTY PAID ANNUAL PERCENTAGE CHANGE in REAL TERMS
-60
-40
-20
0
20
40
60
80
| 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: DEEDS OFFICE; TREASURY; SARB; MFA DATABASE
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
DEMOCRATIC ELECTIONS
ASIAN FINANCIALCRISIS
THE SHADED AREAS REPRESENT THE UPSWING PHASES OF THE BUSINESS CYCLE
ARROWS HIGHLIGHT CYCLICAL LEAD TIMES
ThresholdsSharplyReduced
GLOBAL CRISIS
NCA
When compared to a year ago, transfer duty is at a higher level, implying that the residential property cycle is reviving
HAYLETT AND BER BUILDING COST INDEX COMPARISON INDEX 1975 = 100
0
1000
2000
3000
4000
5000
6000
| 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 00 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 | 11 | 12 | 13 | 14 |
Source: BER; STATS SA; MFA DATABASE
IND
EX
19
75 =
100
HAYLETT BER BCI
HAYLETT(INPUTCOSTS)
BER BCI(TENDER PRICES)
HAYLETT AND BER BUILDING COST INDEX COMPARISON ANNUAL PERCENTAGE CHANGE
-10
-5
0
5
10
15
20
25
30
35
40
| 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 00 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 | 11 | 12 | 13 | 14 |
Source: BER; STATS SA; MFA DATABASE
ANN
UAL
PER
CEN
TAG
E C
HAN
GE
HAYLETT BER BCI (Economic upswings shaded)
COMPARISON BER BCI ANNUAL PERCENTAGE CHANGE & COMPETITION IN TENDERING
-10
-5
0
5
10
15
20
25
30
35
40
| 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 20 | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 |
Source: BER; MFA DATABASE
BE
R B
CI
AN
NU
AL
% C
HA
NG
E
0
10
20
30
40
50
60
70
80
90
100
CO
MP
ET
ITIO
N I
N T
EN
DE
RIN
G
(IN
VE
RT
ED
)
BER BCI APC COMPETITION
COMPARISON: ABSA HOUSE PRICE INDEX & BER BUILDING COST INDEX ANNUAL PERCENTAGE CHANGE
-10
0
10
20
30
40
50
|66|67|68|69|70|71|72|73|74|75|76|77|78|79|80|81|82|83|84|85|86|87|88|89|90|91|92|93|94|95|96|97|98|99|00|01|02|03|04|05|06|07|08|09|10|
Source: ABSA; SARB; BER; MFA DATABASE
AN
NU
AL
PE
RC
EN
TA
GE
CH
AN
GE
ABSA HPI APC BER BCI APC
This graph shows that the movements in building costs and house prices are closely linked, and that both are influenced directly by business cycle fluctuations … with the shaded areas representing the upswing phases
Summary (annual percentage change)
2008 2009 2010
Investment: Res -8 -9 3
Non-res 8 4 -9
C W 31 36 -3
Building costs
Haylett 14.3 1.7 5.0
Tender prices 14.4 -0.8 5.2
