South Africa’s latest building statistics point to a construction industry that is becoming increasingly uneven across the country, with some provinces seeing a significant reduction in building activity while others continue to expand. For the construction sector, this is likely to translate into a more competitive market for work in some regions, even as opportunities increase in others. For residential property, meanwhile, the figures suggest that the supply of new homes may remain constrained in weaker markets - a factor that could ultimately support the prices of well-located existing properties.
Statistics South Africa (StatsSA) reports that while the value of building plans passed by the major municipalities increased by 1,2% during the first five months of this year compared to the same period of 2025, with the biggest increase (R1,35bn) being in the residential buildings category.
The report also shows that total value of buildings actually completed in this period fell by 4,2%, with five of the nine provinces recording year-on-year declines and only the Eastern Cape, Mpumalanga, Northern Cape and Western Cape showing growth.
However, the number of residential buildings completed actually increased in most municipalities. Overall, a total of 2500 houses, 2600 affordable houses and 4900 flats and townhouses were completed, with the year-on-year increases in these categories being 30%, 6% and 0,5% respectively.
The Western Cape led the way, with 1200 houses, 1200 affordable houses and 2300 flats and townhouses completed, and Gauteng was next with 1000 houses, 700 affordable houses and 2000 flats and townhouses completed.
This shows that construction is not heading into a nationwide downturn, but does highlight a market in which the availability of work is becoming increasingly dependent on location, local economic conditions and the strength of demand for new development – and in which completion figures should always be read alongside the actual number of new building plans passed and other forward-looking indicators.
For example, the StatsSA report shows a 43,4% increase in the number of plans passed for dwelling houses bigger than 80sqm in the first five months of this year, as well as a 23,7% increase in the flats and townhouses category, but a 6,5 decline in the number of plans passed for affordable houses.
The report also shows an 11,5% decrease in the square meterage of plans passed for residential additions and alterations, and a decline for non-residential space, except in the shopping centre category, where plans were passed for some 366 000sqm of new space. Office, banking, industrial and warehousing space percentages were all down compared with the first five months of 2025.
In the first five months of the year, the Western Cape showed an 11,5% in the number of plans passed for large houses to almost 800 and a 41,2% increase for flats and townhouses to around 3700; while Gauteng recorded a 45% increase in the number of plans passed for houses to 1700 but a 6,2% decrease in the number of plans passed for new flats and townhouses to 1600.
In KZN, plans were only passed for 30 new houses and 1000 new flats and townhouses, and the implications of such variations are profound for the residential property market.
Where the number of plans passed and the new development pipeline slows, the supply of newly built homes is likely to become more limited. This can be supportive of existing properties, particularly in established areas where land is scarce and demand remains relatively resilient.
While a slowdown in construction does not automatically make existing homes more expensive, buyers who can’t find the type of home they want in a new development may increasingly turn to the existing market, boosting competition for pre-owned homes and potentially providing support for rising prices in this sector.
It must be said that when it comes to new-build pricing, developers have to recover the cost of land, construction, professional fees, finance, infrastructure and other development expenses, which means they can’t simply reduce their selling prices when demand weakens.
What is more, if construction input costs continue to rise, they can either respond by building smaller homes and reducing specifications, or halting activities while waiting for market conditions (demand) to improve. And once again, this can limit the supply of new housing and help maintain the relative value of existing stock.
The provincial differences in the latest StatsSA report are therefore significant. The Western Cape’s strong contribution suggests continued development momentum and a greater flow of new housing into the market in that region, while Mpumalanga is also showing encouraging activity. In Gauteng, KwaZulu-Natal and North West, the weaker figures could point to a period in which developers and construction companies become more selective about new projects.
And for homebuyers, this reinforces the importance of looking beyond headline national statistics. A softer construction market does not necessarily mean falling property prices. In many areas, a combination of limited new supply, rising replacement costs and continuing demand for well-located homes could provide a floor beneath prices.
For developers and builders, meanwhile, the message is perhaps even clearer: the opportunities are still there, but they are becoming more location-specific and demand-driven. The companies best positioned to navigate the next phase of the market are likely to be those that can control costs, respond quickly to changing buyer preferences and identify the areas where demand is strong enough to support new development.
