In the 2022/23 financial year (July 2022 - June 2023), the number of building plans approved in Durban increased by 3.7%, totaling 4,748; compared to the previous count of 4,579 in 2021/22 (July 2021 - June 2022). However, there was a notable decline of 9.7% in the total value, dropping from R11.0 billion in the previous year to R10.0 billion. The quarter-on-quarter analysis depicts substantial growth of 31.9% in the number of approved building plans. The North region emerged as the primary contributor with 298 building plans, closely followed by the Outer West with 273, the Inner West with 229, the Central with 226, and the South with 104. The additions and alterations category accounted for the largest share of contributions at 66.5%, followed by residential at 31.8%, with commercial and industrial making up 0.9% and 0.8% respectively. Most approved industrial building plans in the last quarter (Q4) of the 2022/23 financial year originated from the North and Central regions.
Figure: 1 Building Plans Approved, per Financial Quarter 2021/22 Q4 - 2022/23 Q4
Source: eThekwini Municipality Development Planning and Economic Development Units, 2023
According to an analysis carried out by the Policy, Strategy, Innovation & Research (PSIR) Department, the expected contribution of the 2022/23 building plans to GDP is around R2.3 billion. Although construction of approved buildings typically spans over years, it is valuable to contextualise this impact. At R2,3 billion, the forecasted impact of these approved construction projects amounts to approximately 0.6% of the City's GDP in 2022. Furthermore, the projected impact on employment suggests the creation or sustenance of approximately 1,565 jobs. This figure accounts for roughly 0.1% of all employed individuals in Durban in 2022, based on data from the StatsSA Quarterly Labour Force Survey.
In 2022, the total value of building plans passed across all eight metropolitan municipalities amounted to R117,5 billion. Among these municipalities, the combined contributions of the metros with the five biggest economies (Cities of Johannesburg, Cape Town, Tshwane, Ekurhuleni and eThekwini) accounted for 62.2% of this total value (R73,1 billion). The City of Cape Town held the highest contribution, making up 16.3% (R19,1 billion) of the total value, followed closely by the City of Tshwane at 16.0% (R18,8 billion). Other notable contributions were from eThekwini at 11.0% (R12,9 billion) and Ekurhuleni at 9.5% (R11,2 billion).
The total number of building plans approved in all eight metropolitan municipalities decreased by 3.96%, going from 89,389 to 85,845 applications. The City of Cape Town made the most significant contribution of building applications approved, followed closely by the City of Tshwane with 10,729 approvals. Other noteworthy contributions came from Ekurhuleni with approvals and eThekwini with 6,481 approvals.
Figure: 2 Trend of Building Plans Approved Per Metro
Source: StatsSA,2023
The total value of completed buildings for all eight metropolitan municipalities was R67,8 billion and the combined contribution from the big five constituted 74.9% of this total value, amounting to R50,8 billion. The City of Cape Town dominated again with a substantial contribution of 31.4% (R21,3 billion) of the total value of completed buildings. Following behind were Ekurhuleni at 11.8% (R8,0 billion), the City of Tshwane at 10.9% (R7,4 billion), eThekwini at 10.0% (R6,8 billion), and the City of Johannesburg at 7.0% (R4,7 billion).
In the 2022/23 financial year, the value of building plans approved declined significantly. Also, eThekwini's building plan approvals are relatively lower in comparison to those of other leading metros. This can be attributed to the inefficiencies in the application process for building plans, which has led to a backlog of work as well as service delivery issues and recent disasters. The reduction of government spending may have led to a considerable number of major projects being stalled, primarily due to insufficient bulk infrastructure, especially some listed under Catalytic Projects. Implementing an automated system can improve the approval rate for building plan applications. The decrease in building plans approved is expected to have a slight negative impact on economic activity, resulting in a forecasted decline of nearly R200.0 million in GDP compared to the previous year's forecasted impact of R2.5 billion.
On a positive note, the value of completed building plans increased considerably (32.3%), rising from R5.1 billion to R6.8 billion in 2022. The EDU (EThekwini Municipality Economic Development Unit) and UDZ (Urban Development Zone) incentives may have impacted the increasing number of building plans completed.
Produced by The Durban EDGE Team of the Policy, Strategy Innovation, and Research Department of the Economic Development Unit of eThekwini Municipality
For more information, contact edge@durban.gov.za, Ref: Siphesihle Thusi: Economic Research Advisor-Economic Information and Research.
