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Building activity improve in South Africa
Positive news in a recent report from ABSA Homeloans
confirmed that building activity in the residential property market is
showing positive improvement in the first quarter of 2011 compared to
the same period in 2010.
The number of new housing units for which building plans
were approved by local government authorities was up by 14,6%
year-on-year (y/y), or 1 331 units, in the first three months of 2011.
This increase is largely attributed to increase demand in
plans approved for houses smaller than 80m2, flats and townhouses. It is
clear that the demand lies in smaller-sized and higher-density housing.
The major banks more lenient lending criteria for mortgage finance in
the affordable market together with the increased demand for housing in
this segment has kick started the activity.
The Lightstone Index statistics of April 2011 indicates
that there are an estimated shortfall of one million properties for
households earning between R3000-R6000 per month, that would also make
up a portion of the rental market for properties with values between
R200 000 – R500 000.
This positive trend is most certainly encouraging and
will attribute to increased activity in the residential property market
– something we have been waiting for, for more than 2 years.
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