VALUE BUILDING PLANS DECLINED BY 5.0% IN Q3 23/24
INTRODUCTION
This data story explores the City’s building plan approval performance through the third quarter of the 2023/24 financial year. It examines the quarterly values and number of building plans, identifying trends of expansion and contraction. The analysis also compares Durban's performance in terms of building plan values and numbers across different categories and regions. This evaluation is vital for understanding the domestic investment outlook and monitoring the city's economic activity.
PERFORMANCE OF BUILDING PLANS APPROVED
The value of approved building plans in the first three quarters of the 23/24financial year reached an estimated R4,5 billion, contributing 1% to Durban's GDP. This significant investment highlights the city's ongoing development and its impact on the local economy. In Q2 23/24, the total value of approved plans was R1,534 million, with 3,463 approvals. However, by Q3 23/24, the total value declined by 5% to R1,458 million. More notably, plan approvals dropped sharply by 72% to 976. This dramatic reduction reflects a fluctuating construction sector, largely driven by investors and developers holding back their funds due to uncertainty surrounding the election outcome (Risenga Maluleke Statistician-General, 2024). The value of approved plans declined by 53%, fromR3,107 million in Q3 22/23 to R1,458 million in Q3 23/24.
Figure 1: eThekwini’s Building Plans Approved
The north region saw a 4.8% increase in the approved value of building plans, rising from R437.2 million in Q2 23/24 to R458.4 million in Q3 23/24.Similarly, the Central region showed impressive growth of 9%, rising fromR372,5 million in Q2 23/24, to R406,0 million in Q323/24.The inner west region saw the largest growth in Q3 23/24, with the value of approved building plans rising by 11.1%. In contrast, the south region experienced a steep decline of 45.9%, dropping from R298,3 million in Q2 23/24, to R161,4 million in Q3 23/24. The outer-west region experienced a decline of 7.2%, from R226,2million in Q2 23/24 to 209.9 million in Q3 23/24.
The north region saw a9.9% increase, with the approved number of building plans rising from292 in Q2 23/24 to 321 in Q3 23/24. The central region showed robust growth, with a 19.4% increase from 284 in Q2 23/24 to 339 in Q3 23/24 of the approved number of building plans. Conversely, the south region experienced a dramatic97.8% decline, plummeting from 2,485 in Q2 23/24 to just 55 building plans inQ3 23/24. However, the inner-west region witnessed a significant decrease of44.4%, dropping from 252 to 140 in the number of building plans in Q3 23/24.Similarly, the outer west region faced a 19.3% decline, falling from 150 in Q223/24 to 121 in Q3 23/24 of the approved building plans.
TYPE OF BUILDING PLANSAPPROVED (BETWEEN Q2 23/24 AND Q3 23/24)
The value of residential building plans increased by 34%, from R401,0 million to R607,6 million. Despite this, the number of approved residential plans saw a dramatic decrease of 89.8%, from2,591 to 265. This decline was primarily driven by dwelling houses, which saw their value fall from R271,7 million to R244,1 million and their number of approvals plummet from 2,488 to just 73. While flats and townhouses increased in value significantly, from R127,7 million to R360,9 million, their number of approvals rose modestly from 102 to 188. Other residential buildings also saw an increase in both value and approvals, rising from R1,5 million to R2,6 million and the number of plans increased from 1 to 4, respectively.
The value of non-residential building plans experienced a dramatic decline, decreasing by 216% from R402.0million to R127.2 million. However, the number of approved non-residential plans fell by 56%, from 25 to 11. This shift can be seen across specific categories within the non-residential sector. Office and banking space values decreased from R58,9 million to R34,1 million, while the number of approvals increased slightly from 4 to 6. The shopping space saw a complete halt in approvals, dropping from R16,1 million with 2 (number) approvals in Q2 23/24 to zero in both value and number in Q3 23/24. Industrial and warehouse space experienced a significant decline in the number of approvals, from 12 to 4, and a decline in value from R305,6 million to R36,5 million. Other non-residential buildings, however, saw a notable increase in value from R21,4 million to R56,7million, even though the number of approvals dropped from 7 to 1.
Additions and alterations saw a slight decrease in value, declining by 1.1% from R731,3 million to R723,1 million, while the number of approved plans in this category decreased by 17.4%, from 847 to 700. This overall decline is primarily reflected in the other residential buildings, which saw both value and approvals drop significantly from R117,1 million to R106,7million, and from 348 to 240. Meanwhile, other non-residential buildings maintained a relatively stable value, with only a slight decrease from R162,5million to R162,2 million. Interestingly, the number of approvals in this category slightly increased from 36 to 41, indicating a mixed trend within the sector.
Dwelling houses, which constitute a significant part of the additions and alterations category, experienced a minor increase in value from R451,7 million to R454,2 million. However, the approvals for dwelling houses dropped from 463 to 419.
Figure 2: Type of Building Plans Approved
CONCLUSION
The value of building plans approved in the third quarter of the 2023/24 fiscal year reached R1,458million, marking a 5% decline from the previous quarter. This decrease is consistent with the 2.3% drop observed in the FNB/BER building confidence index for the first quarter. The results reflect a fluctuating construction sector, driven largely by investors and developers withholding funds amid uncertainties related to the national and provincial election. The decrease in the value of building plans approved in the third quarter was primarily influenced by reductions in the non-residential sector, as well as in additions and alterations in the southern and outer western regions.
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
REFERENCE LIST
1. StatsSA, Selected building statistics of the private sector as reported by local government institutions 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
3. Bureau for Economic Research and First National Bank Building confidence index, 2024https://www.ber.ac.za/Documents/Index/FNB-Building-Confidence-Index
4. Sunday Times news article Q1 2024 GFC, statement by StatsSA, Risenga Maluleke Statistician-General, June 2024: https://www.businesslive.co.za/bt/business-and-economy/2024-06-09-investors-hold-back-over-political-uncertainty/
