The residential property market has taken a big knock as consumer spending dwindles because of the global financial crisis.

The number of residential building plans approved between January and November last year declined by 17.8 percent year-on-year as the property market continued to take strain.

Jacques du Toit, property and vehicle markets analyst at Absa, said housing construction was expected to decline further on the back of lower demand and a bleak economic outlook for this year.

The latest figures from Statistics South Africa show a continued slowdown in residential property activity with only 77 998 building plans, valued at R17.85-billion, approved by local authorities between January and November last year.

Du Toit said this figure was 25.5 percent down year-on-year, compared to R23.98-billion recorded for the same period in 2007.

The number of residential buildings completed showed a decline of 8.9 percent to 64 473 units, valued at R14.83 billion, compared to 70 766 units, at a total value of R16.38 billion, the previous year.

Makwe Masilela, analyst at Nehawu Securities, said the depression in the property market was also reflected in the poor performance of construction stocks on the JSE.

Aveng is down to R26.35 from R51.15 last January, while Murray & Roberts is trading at R43.50 from R88.

Wilson Bayly Holmes-Ovcon has dropped from R112 to R99. Pretoria Portland Cement has also shed R11.50 to R27.95 from R39.50 last January.

Source: The Times

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