Housing boom in SA creates more than 100,000 new jobs

The Western Cape is experiencing a surge in residential property development and records the highest number of new jobs in the construction sector.

The Western Cape has seen a 77 percent increase in new homes built over the past 12 years, with more than 19,000 units constructed last year alone.

This province, combined with Gauteng and KwaZulu-Natal, accounts for 79.7 percent of all residential building plans passed in 2022, an increase from 68.1 percent in 2010.

The high level of building in the residential property sector is likely a strong driving force behind the increased employment rate in the construction industry in the second quarter of 2023; the industry recorded more than 100,000 new jobs.

The Western Cape tops the list with the largest share of residential building plans passed and the second-highest increase over the past decade.

Interestingly, says Dr Andrew Golding, chief executive of the Pam Golding Property group, the number of plans passed in the Western Cape declined sharply before Covid, fell further during the pandemic, but then rebounded strongly, quite possibly fuelled by the strong semigration trend.

Gauteng, which accounts for the second-largest number of residential building plans passed, was experiencing strong growth until Covid, but has since failed to recover from the impact of the pandemic and passed fewer residential building plans in 2022 than in 2010, Statistics SA data reveals.

“While KZN remains in distant third spot, it has registered a solid 51.1 percent increase in the number of residential plans passed since 2010 and a more than doubling (128.7 percent) in the value of plans passed over the same period,” he says.

Limpopo recorded a whopping 122 percent growth in units from 2010 to 2022, but its contribution to the number of new units built last year is only 5 percent.

The value of all building plans passed nationally rose by 84.1 percent between 2010 and 2022, but the total value of residential plans more than doubled, increasing by 129.8 percent to R62.19m last year, Golding says. This is compared to the “more modest” increase in the value of non-residential building plans – including office, retail, industrial, religious, and educational buildings – which rose by 66.2 percent to R22.108m, and a 41.5 percent increase to R33.19m in building plans for alterations and additions.

“As a result of the robust increase in the value of residential building plans passed over the past 12 years, this sector now accounts for more than half of the total value of building plans passed nationally – up from 42% in 2010 to 53% in 2022. With residential plans passed accounting for a larger portion of total plans passed, the percentage of both non-residential and, more notably, alterations and additions declined.”

Although the total number of residential plans passed in 2022 rose by just 3.9 percent compared to 2010 levels, non-residential plans passed decreased by 19.7 percent, while the number of alterations and additions slumped by nearly a third (31.5 percent) during the same period, Golding says.

Residential building plans passed now account for 58% of the total number of plans passed nationally, compared with 48% in 2010.

Construction sector employment

With this robust growth in residential building plans passed last year, it is no surprise the construction sector has seen the highest growth in employment in the second quarter of 2023, as revealed in Stats SA’s Quarterly Labour Force Survey results released on Monday.

In the April to June period, 1,304 million South Africans were employed in the construction sector, an increase of 104,000 – 62,000 in the formal sector and 42,000 in the informal sector – from the first quarter of 2023.

The Western Cape has seen the highest employment rate increase in the construction sector, with 74,000 new jobs in Q2 compared to Q1, and 103,000 more jobs in Q2 2023 compared to Q2 2022. This is an increase of 43.9 percent and 73.2 percent respectively.

In Q2 2023, 244,000 people in the Western Cape were employed in the construction sector. Gauteng accounts for the most jobs in this sector with 317,000, followed by KZN with 231,000.


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