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Building Plans Approved by Province and Type Jan 1994 - July 2024

The nominal value of private sector building plans approved increased by 5.5 percent year-on-year (y-o-y) in July 2024, following a revised 31 percent decline in June. In terms of square metres, approvals rose by 0.5 percent on a y-o-y basis. This modest growth was driven by a strong performance in non-residential approvals, which surged by 61 percent, while residential approvals saw a 16 percent decline. Demand for retail space rose by 20.7 percent y-o-y over the last 12 months, with the largest increases in Gauteng, followed by North West and Western Cape. However, Free State and Limpopo experienced weaker demand during this period. The annual rate of decline in approvals moderated to 17.9 percent y-o-y up to July, compared to -19.1 percent in June 2024. The South African Reserve Bank's decision to lower the repo rate by 25 basis points, reducing the prime rate to 11.25 percent, is seen as the start of a much-needed rate-cutting cycle. The DIY market is expected to respond positively to this improved interest rate environment, although further rate cuts may be required. As sentiment improves and affordability rises, demand for residential space is anticipated to recover over the next 6 to 12 months. This recovery is expected to result in an increase in new building approvals, which could boost investment towards the latter part of 2025 and into 2026/27, depending on further economic and interest rate developments.

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