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There is perhaps no clearer indicator of economic conditions than buildings completed. If the economy booms so does new buildings of various types. When there is a slowdown building activity will decline too. We take a look at the number of square meters of new buildings completed per building type and province per year from 2010 to 2016 (2016 is estimated by using data up to April 2016 and extrapolating until end of 2016).
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Office Space:
The bar chart above shows number of square meters of office space completed per province per year from 2010 up to 2016. As the bar chart above shows, the major office space being completed took place in South Africa's three biggest provinces in terms of economic activity. Gauteng, KwaZulu-Natal and Western Cape. While there is a clear downward trend in square meters of office space completed in Gauteng in the last three years, this is not the case in KwaZulu-Natal and Western Cape. Perhaps signalling that Gauteng's office space is saturated.
On a total level there is a substantial drop in the total new office space from 2013 to 2014 and 2015 levels, and new office space completed so far in 2016 that has been extrapolated for the rest of 2016 shows there there will be a slight uptick in overall office space in South Africa, although SA's major economic hub, Gauteng seems to be bucking the trend and looks set for less new office space completed than the preceding four years. Estimated level in Gauteng for 2016 will be the lowest since 2011.
On a total level there is a substantial drop in the total new office space from 2013 to 2014 and 2015 levels, and new office space completed so far in 2016 that has been extrapolated for the rest of 2016 shows there there will be a slight uptick in overall office space in South Africa, although SA's major economic hub, Gauteng seems to be bucking the trend and looks set for less new office space completed than the preceding four years. Estimated level in Gauteng for 2016 will be the lowest since 2011.
Shopping Space:
The bar chart above shows new shopping space reported as completed per province per year. The sharp spike for KwaZulu-Natal is due to the fact that large square meterage was reported as completed in KwaZulu-Natal so far in 2016, and this makes the total estimate for 2016 extremely high (so the number should be looked at with caution).
What is interesting to note is that with office space the majority of development took place in Gauteng, KwaZulu-Natal and Western Cape and very small contributions from the other provinces, while with shopping space as shown above, there is a more significant contribution from provinces such as Eastern Cape, North West and Mpumalanga. Fast growth in towns such as Rustenburg over recent years have lead to greater demand for shopping space in North West in particular.
But looking at the trend over the last couple of years, it is clear there is a slow down in the overall amount of new shopping space being built (when looking at the values for 2016 for all the provinces (bar KZN). In line with South Africa's current economic woes. Slower growth has lead to less demand from consumers and therefore less new shopping space being supplied.
Note the total for 2016 is skewed by abnormally high new shopping space finished in 2016 so far in KwaZulu-Natal, inflating the estimated total figure for 2016 for both KwaZulu-Natal and the overall total.
What is interesting to note is that with office space the majority of development took place in Gauteng, KwaZulu-Natal and Western Cape and very small contributions from the other provinces, while with shopping space as shown above, there is a more significant contribution from provinces such as Eastern Cape, North West and Mpumalanga. Fast growth in towns such as Rustenburg over recent years have lead to greater demand for shopping space in North West in particular.
But looking at the trend over the last couple of years, it is clear there is a slow down in the overall amount of new shopping space being built (when looking at the values for 2016 for all the provinces (bar KZN). In line with South Africa's current economic woes. Slower growth has lead to less demand from consumers and therefore less new shopping space being supplied.
Note the total for 2016 is skewed by abnormally high new shopping space finished in 2016 so far in KwaZulu-Natal, inflating the estimated total figure for 2016 for both KwaZulu-Natal and the overall total.
Industrial and Warehouse Space:
As is the case with office space and shopping space, the biggest contributors to new warehouse and industrial space being in South Africa's biggest provinces (in terms of economic size), being Gauteng, KwaZulu-Natal and Western Cape. Eastern Cape also making a significant contribution in terms of new industrial and warehouse space. Perhaps the Coega Industrial development zone. Large amounts of car manufacturing and shipping for export takes place in Eastern Cape too. Continued investment in this sector in recent years contributing to strong industrial development in Eastern Cape.
Gauteng is still the main hub where new industrial and warehouse space is popping up. In particular close to the Johannesburg Internation Airport and its surrounding highways such as the R21. Ekurhuleni metro proudly calls itself an "Aerotropolis". A term used for metropolitan area where layout, infrastructure and development is centered around an airport.
Again looking at the overall trend, there has been a slowdown in new industrial and warehouse developments in recent years.
Gauteng is still the main hub where new industrial and warehouse space is popping up. In particular close to the Johannesburg Internation Airport and its surrounding highways such as the R21. Ekurhuleni metro proudly calls itself an "Aerotropolis". A term used for metropolitan area where layout, infrastructure and development is centered around an airport.
Again looking at the overall trend, there has been a slowdown in new industrial and warehouse developments in recent years.
Residential Space
The above bar chart shows new residential space completed per year per province. as can be seen from the total there is a clear decline in the number of new square meters of residential space being built in South Africa. With a growing population one can only assume more people are either renovating current homes and buying already built home instead of building new homes.
What is concerning to see is the systematic decline in both the Eastern Cape and KwaZulu-Natal's new residential space being completed. There is a continued decline in both these provinces. North West is showing signs of life, and Gauteng and Western Cape's numbers looks relatively stable and they are by far the biggest contributors to new residential space being completed. As we have shown in the past, large scale migration takes place into Gauteng (see Migration into Gauteng), so no surprise it's the biggest contributor to new residential space being built in SA.
What is concerning to see is the systematic decline in both the Eastern Cape and KwaZulu-Natal's new residential space being completed. There is a continued decline in both these provinces. North West is showing signs of life, and Gauteng and Western Cape's numbers looks relatively stable and they are by far the biggest contributors to new residential space being completed. As we have shown in the past, large scale migration takes place into Gauteng (see Migration into Gauteng), so no surprise it's the biggest contributor to new residential space being built in SA.