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23 August 2018

Residential building statistics
South Africa - Absa
The planning phase of residential building activity improved in the first half of 2018, but the construction phase contracted sharply

The diverging trends in building activity with regard to new private sector-financed housing (see explanatory note) in South Africa continued up to mid-2018. The planning phase (building plans approved by local government institutions) improved on a year-on-year basis in the first half of the year, whereas the level of activity in the construction phase (housing units reported as completed) showed a substantial contraction compared with the first six months of last year.

The number of building plans approved for new housing increased by 9,3% year-on-year (y/y), or a total of 2 539 plans, to 29 866 plans in January to June this year, with this growth driven by the segment of flats and townhouses, which showed growth of 27,2% y/y in the 6-month period.
Building stats Jun 2018

Office buildings: Some thoughts on the decentralization trend in SA
South Africa - Rode
Worldwide, the tertiary or services sector of the economy -- manned to a large extent by knowledge workers -- is growing much faster than the manufacturing of goods (secondary sector) and the production of raw materials in the primary sector (agriculture and mining). South Africa is no exception, which goes a long way explaining the widening income gap between the poor and well-off. It’s all about knowledge and education.

Workers in the tertiary sector are housed in office buildings, so over the past half century the demand for office space has been outpacing the demand for manufacturing space. Historically, office space was predominantly located in the metropolitan CBDs to take advantage of agglomeration economics. However, with the suburbanisation of cities, the need for decentralized office space, viz. offices closer to home, has been growing in many countries, and South Africa was no exception.

Simultaneously, in the 1980s, the CBDs in South Africa began a process of degradation, and with it started the exponential growth of decentralized office nodes. This trend has gathered pace ever since and today our cities reflect the two-nations economy: the middle class and the poor. The poor do business in the regressing old metropolitan CBDs, whereas the middle class patronize the posh decentralized nodes like Umhlanga Ridge (Durban) and Sandton (Johannesburg). These upmarket nodes are typically anchored by super-regional shopping centres.

The only exception in South Africa is the Cape Town CBD. There are two reasons for Cape Town’s exception. First, it is on the mountain side bordered by high-income residential areas, where decision-takers live, and who evidently want to work close to home. Second, the regression in Cape Town central was close to tipping point when in November 2000 -- in the nick of time − the Central City Improvement District (CCID) was established by local property owners. The turning point is vividly documented by the peaking of capitalization rates – as reported at the time by the Rode Report − a few quarters after the establishment of the CCID.
Rode

Paper-based conveyancing set to go the way of the dodo
Australia - Mortgage business
From social media to virtual reality, cardless payments to driverless cars, technology infiltrates every aspect of our lives. So, why has the property sector — Australia’s biggest industry — been so slow in adopting and adapting to this new reality?

In today’s digital age, it’s frankly quite remarkable how archaic the Australian property industry remains. Ernst & Young’s (EY) 2016 report entitled Will the Australian property sector seize the upside of disruption?[1] suggests that the Australian property industry may be underestimating the impact of disruptive forces which are starting to emerge, and could be facing its very own “Kodak moment”.

As more and more disruptive innovations gain broad acceptance around the world, they are fast becoming business-as-usual at terrifying speed. Despite this, just a handful of companies have successfully disrupted their own business models and innovated. Whether it be Nokia, Blackberry or the taxi industry, the casualty list of antiquated organisations is growing. So, why the delay for property?
Mortgage business

Joburg takes action on building approval abuse
South Africa - IolProperty
The City of Joburg has taken drastic action on building approval abuse by issuing 54 demolition orders that will see these structures flattened to the ground.

The city warned that the days of developers hiding behind temporary building permits were over. It plans to carry out the demolition orders within the next few months - two of which will be done before the end of August.

Amolemo Mothoagea, the city's director of development planning, said there had been some internal problems within the department, but these were being sorted out.
IolProperty

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