ETHEKWINI- BUILDING PLAN APPROVALS UP IN Q2 23/24
INTRODUCTION
Building Plans Approved (BPA) figures have shown a staggering quarter-on-quarter increase of 253.6%, from 979 in Q1 23/24 to 3,462 in Q2 23/24, alongside the calendar (2022 and 2023) year-on-year changes increase of 28.3%. Nevertheless, quarter-on-quarter approvals are down a modest 0.8% in investment value, fromR1.55 billion to R1.53 billion, alongside the calendar (2022 and 2023)year-on-year downturn of -15%. Despite the rise in the number of building plan approvals in Q2 23/24, the calendar (2022 and 2023) year-on-year changes comparison reveals a decrease in both the number and value of the approved plans across most regions.
Table:1
Source: StatsSA, Selected building statistics of the private sector as reported by local government institutions at the current price, 2024
This report will spotlight the performance metrics for the number and value of BPA during the second quarter of the city's 2023/24 fiscal year, providing a comparative analysis and data narrative.
BUILDINGPLANS APPROVED PERFORMANCE
Both the North and Outer West regions experienced a downturn in BPAs quarter-on-quarter, with a decline of -23.0% (dropping from 379 to 292) and-14.3% (falling from 175 to 150), respectively. Additionally, the calendar (2022and 2023) year-on-year changes show a decline of -11.6%. In contrast to the decline in the North and Outer West, the South region experienced a remarkable surge in BPAs, up from 112 in Q1 23/24 to 2,485 in Q223/24. The Central BPAs rose from 149 to 284, representing a 90.6% increase, and the Inner West region saw a 53.0% increase in BPAs, from 164 in Q1 to 251 in Q223/24. The increase in the South region was driven by the approval of building plans for Dwelling houses with floor areas of 80 square meters or more, recorded in October 2023. This increase in the South was linked to repairs from flooding and critical investments.
Figure 1: Number of Building Plans Approved Per Regions
Source: StatsSA, Selected building statistics of the private sector as reported by local government institutions at the current price, 2024
The approval of residential building plans increased by 1,189% in the second quarter, jumping from 201 to 2591 homes. The South region, where dwellinghouses with floor areas of 80 square meters or more represented 92% of all residential approvals, was largely responsible for this dramatic rise. However, the overall investment value in residential projects dropped by 4.4% across the city, with declines of 7.6% in the North, 8.2% in the Inner West, and a notable33.8% in the Outer West.
There was a significant uptick in the approval of non-residential building plans, with a 33.3% increase from 18 to 24 approved plans. Furthermore, there’s been a104% surge in value from R197.1 million to R402.0 million. This growth is primarily attributed to developments in the North and South regions. Specifically, investment in industrial and warehouse space in the North region soared from R16.7 million to R119.4 million, while the South region saw its value jump from R11.1 million to R126.9 million in the same category. Following these, the Inner West region also reported growth, with its value rising fromR133,000 to R7.5 million in the second quarter.
InQ2, there was an 11.4% rise in the approval of additions and alterations to building plans, increasing from 760 to 847. However, the total value of these approved plans decreased by 21.4%, falling from R930.8 million to R731.3million. This reduction in value can be attributed to a significant average drop of 45.1% in the North, a 25.6% decrease in the Inner West, and a 12.9%fall in the South region. Despite this, the uptick in the number of approved plans was sustained by a remarkable 110.2% increase in the Central region and a9.2% rise in the Inner West.
CONCLUSION
There has been a notable increase in the number of building plans approved during the second quarter of the 23/24 financial year. However, the overall value of investment has declined by 0.8%. A similar trend is witnessed when comparing the data of 2022 and 2023 year-on-year changes. In the second quarter, residential, additions and alterations took the lead in the number of building plan approvals. The value of investment decline witnessed in the analysis is a result of weak performance in key growth regions such as the North, South, and Outer West. This trend is likely due to uncertainty, as investors or developers hold back on large investments until the national elections are over, as well as the high holding costs associated with vacant land.
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@durban.gov.za
Economic Research Advisor
Economic Information and Research
REFERENCELIST
1. StatsSA, monthly building plans passed by larger municipalities at the current price,2024, https://www.statssa.gov.za/?page_id=1854&PPN=P5041.1&SCH=73497
2. EThekwini Municipality, Development Planning Applications and Approvals, 2024, https://www.durban.gov.za/pages/government/documents?d=DPEM/Forms%20Download/Development%20Applications%20and%20Approvals
