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• Create Date May 8, 2023
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Building Plans Approved National Summary February 2023

Following a dismal performance in December 2022 and January 2023, approvals increased by a marginal 0.6 percent y-y in February 2023, with just over 1 million sqm approved for the month (compared to less than 700 000 sqm in January, resulting in a 41 percent y-y decline by comparison to January in 2022). Approvals for housing increased by 2.3 percent y-y for the month, while the non-residential sector contracted by 4.8 percent.  These numbers do not as yet take into account the latest 50 basis point increase in the repo rate announced in March 2023, that pushed the prime lending rate to 11.25 percent. Overall approvals are down 0.8 percent y-y over the last 12 month period, with housing down 4.2 percent, and approvals in the non-residential sector up 10.1 percent (coming off a low base). The only market segment in the non-residential sector that has shown any signs of improvement remains within the industrial sector. Both the office and retail market remains severely distressed, with the levels of approvals and completions at near record lows. Given the recent increase in headline inflation to 7.1 percent in March 2023, concerns are rising that further rate hikes remain a strong possibility. As inflation remains a national concern, public sector wage agreements should also adhere to inflation targeting requirements as it is not only the responsibility of the private sector to ensure price stability.

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