THE GOOD NEWS

Despite the challenges of the past two years, the future is looking substantially brighter than it has for some time. Claybrick members in Gauteng and the Western Cape are reporting signs of improved trading conditions, with a steady flow of private non-residential projects in warehousing, offices, and hotel and retail developments. Projects that were shelved for two years are now being awarded.

Further good news is that Government funding will become available from the Treasury in May or June 2010, and it is anticipated that the volume of public sector non-residential projects will steadily increase from the 3rd quarter of 2010.

The banks are finally relaxing their lending criteria and are once more granting 100% bonds to first-time home buyers. Although more than half of all loan applications are still being declined, Government is bringing pressure to bear on the banks to be more helpful instead of holding the entire property industry to ransom.

PRIVATE SECTOR FORECASTS

The current improved economic environment and the shift in the banks’ stance will impact positively on the building industry going forward for the next 12-24 months, and it is anticipated that activity levels across most building segments will exhibit modest growth from the 3rd quarter of 2010.  The BMI Building Research Strategy Consulting Unit (BRSCU) forecasts that this will amount to an increase in total investment in building and construction, across the board, of approximately 3.34%.

PUBLIC SPENDING FORECASTS

Another study, conducted by BMI BRSCU on behalf of Claybrick.org, has forecast that the current upturn, which began in January 2010, will continue for a period of five or more years. Growth will, in part, be driven by public spending as Government strives to eliminate the housing backlog by 2015.

Although seen as a difficult task in this timeframe, it is quite possible to achieve this objective by 2020. In the process, housing delivery will increase to some 500 000 units annually, delivering 5 million housing units by 2020, with an investment of some R350 billion, assisted by the provision of cumulative Capital Subsidies of some R200 billion by that time. 

We believe that Government’s commitment to turn shelter into an asset that can be leveraged as collateral will dramatically transform South Africa’s economic landscape by driving wealth creation at the lower end of the market, truly making 'property ownership the engine of economic growth and wealth creation' for the people in South Africa.