Transcript South Africa, National House Builders Registration Council

STATE OF THE HOUSING INDUSTRY
PRESENTATION - SOUTH AFRICA
J. Mahachi
NHBRC
[email protected]
February, 2016
IHA Secretariat
Summary Overview of NHBRC



NHBRC regulates the home building industry and is
legislated through an Act of Parliament.
All Home Builders must be registered with the NHBRC,
current active membership is about 17,000.
All new homes are to be enrolled with the NHBRC
Cash or mortgaged houses;
 Speculative houses;
 Social or affordable houses; and
 Government subsidy houses.

Government’s
Vision for
Human Settlements
Challenges
in Housing
Delivery in
South Africa

Accelerate housing delivery (Current backlog in excess of 2.2 million),

Current delivery rate is low

Govt target to deliver 1.5 million housing opportunities (land and top
structures) in next 5 years

use housing provision as a job creation strategy,

ensure access to property and home loans by all,

Access to finance and building materials by small emerging
companies,

develop integrated and sustainable human settlements.

Availability of funds and land;

Limited physical production; and

Low profit margins particularly in the low income housing
SA Market Trends Analysis


Residential Building Market affected by:
• Economic trends;
• Household finances;
• Consumer confidence;
• Increasing trends in building costs; and
• Changing lifestyles.
Household affordability affected by:
• Household financial position;
• Property prices;
• Transaction costs; and
• Property running costs.
Trend Analysis
Indicator
Dec 2014/15
Dec 2015/16
y/y Growth
Unemployment Rate
25.1%
25.5%
1.6%
Consumer Price Inflation
5.3%
5.2%
-1.9%
Govt Subsidised House
(Social House) (40m2)
R110,000
($6,800)
R110,000
($6,800)
0%
Small Houses (80140m2)
R778,000
($48,500)
R830,000
($51,700)
6.7%
Medium sized homes R1,085,000
(141-220m2)
($67,800)
R1,224,000
($76,500)
12.8%
Large homes (221400m2)
R1,892,000
($118,200)
10%
Av. Nominal House Price
R1,720,000
($107,500)
ZAR1 = US$16
Trend Analysis (Cont…)
Indicator
Dec 2014/15
Dec 2015/16
y/y Growth
Construction Starts:
- Single Family (Plot & Plan)
7,264
6,245
-16.3%
- Multifamily (Sectional Title)
31,052
30,199
-2.8%
- Govt Subsidy Houses
(Social Houses)
84,375
62,224
-35.6%
$349.86 bn
$350 bn
0.4%
1.3%
0.7%
-85.7%
$6,090
$6,086
0.1%
Population
54.0m
54.1m
0.2%
Home Mortgage Interest Rate
9.25%
9.75%
5.1%
Gross Domestic Product (GDP)
GDP Growth
GDP Per Capita
Trend Analysis (Cont…)
Indicator
Dec 2014/15
Dec 2015/16
y/y Growth
Consumer Price Index
111.0
116.1
4.4%
Home Ownership Rate
60%
62%
3.2%
Trend Analysis (Cont…)
Residential Building Activity
1994-2015
BUILDING PLANS APPROVED
BUILDINGS COMPLETED
SEGMENT
UNITS
% OF TOTAL
UNITS
% OF TOTAL
Houses of <80m2
694,707
43.3
554,204
46.6
Houses of ≥80m2
481,791
30.0
319,523
26.8
Flat and Townhouses
427,397
26.6
316,707
26.6
1,603,895
100
1,190,434
100
Total
Private Sector Financed
Source : Stats SA
1
Residential Building Activity
(Jan – Dec 2015 % Share)
(18,076)
(10,534)
(15,868)
(11,186)
(21,680)
(14,611)
Remodelling – Jan to Dec’15
(Alterations & Additions)
2014
2015
% Change
2,969,372
3,167,437
6.3%
Buildings Completed 1,032,898
(m2)
1,183,121
12.7%
Plans Approved
(m2)
Number of Construction Starts
(Enrolment)
100,000
7.0
90,000
6.0
80,000
Target
54,000
Enrolments
60,000
5.0
4.0
50,000
3.0
40,000
30,000
Enrol/Builders
70,000
2.0
Enrolments
20,000
1.0
10,000
2002
2004
2006
2008
2010
2012
2014
0.0
2016
HB Ratio
External Factors affecting the
Economy
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
Impact of China’s Economic Slowdown
Lower Chinese demands for Commodities, such as:

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
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

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Platinum;
Palladium;
Gold;
Manganese; and
Diamonds.
Rising US interest rates
Weak commodity prices
Capital Outflow and Foreign Direct Investments (FDI)
Investment Grading (Down-Grading) by Rating Agencies
Internal Factors affecting the
economy
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Regulatory Impact Assessment (RIA) and Policy implementation
Weak commodity prices
Infrastructure gap
 Inadequate power supply
Impact of drought on economic growth and inflation
Declining Gold and Foreign Exchange Reserves
Implementation of the Immigration Act and visa regulations
Protracted industrial action
Labour tensions
Depreciation of the rand
Govt’s Nine Point Action Plan
1.
2.
3.
4.
5.
6.
7.
8.
9.
Resolving the energy challenge;
Upping the agricultural value chain;
Beneficiation through adding value to mineral resources;
More effective implementation of higher impact industrial
policy plan;
Encouraging private sector investment;
Moderating workplace conflict;
Unlocking the potential of SMMEs, cooperatives, townships and
rural enterprises;
Reform of state-owned companies, broadband roll out, water
sanitation and transport infrastructure and
Operation Phakisa which aims to grow the ocean economy –
such as shipping and storage of energy products.
Thank You