The\u00a0home-building sector has entered a serious decline in past years, resulting in buying a home being a much better option than building one says\u00a0Bill Rawson, Chairman of the Rawson Property Group.<\/p>\n
Despite strong pockets of activity, the overall picture is declining, Rawson said, citing statistics provided by\u00a0Stats SA\u00a0showing that\u00a0levels of activity in both the planning and construction phases of private-sector housing having shrunk considerably in the first seven months of 2016.<\/p>\n
Just over 32,000\u00a0plans passed for new homes over the past year, equating to a\u00a08.4%\u00a0year-on-year decline.<\/p>\n
The silver-lining\u00a0is that these decreases should\u00a0bolster prices in the pre-owned sector of the residential market, Rawson said.<\/p>\n
“According to Absa, the cost of stands in the middle and luxury segments of the housing market showed a year-on-year increase of 21% in the second quarter of this year, while the cost of having a new house built increased by 8.5%.”<\/p>\n
“As a result of these and other factors, it is currently 28.6% more expensive, on average, to buy a newly-built home than to buy a similar pre-owned property.”<\/p>\n
With less “stock” coming on to the market, Rawson believes competition will grow for homes currently available, driving prices down.<\/p>\n
“Eventually, that will restore developers\u2019 confidence and encourage them to start planning new projects once again, but with the economy in its current slow mode, I expect the construction recovery process to be a lengthy one,” he said.<\/p>\n