Townhouse and apartment developments are leading the way in the Eastern Cape building boom, with the number of plans passed growing by more than 80 per cent in the past year.

Figures issued by Stats SA show that the number of flats and townhouses completed in some of the larger municipalities in the province grew by a massive 74,7% in the first six months of this year compared to the same period last year.

The number of building plans passed for flats and townhouses in the province has also shown growth of 86,8%, with 403 plans passed between January and July last year compared to 753 this year.

These figures are way above the national average of a 17,2% year-on- year increase for the number of building plans passed for townhouses and flats, and the 15,2% increase in the number of completed townhouses and flats.
Experts say a demand for townhouses is partly responsible for the boom.

Developers can also make more money from complexes. As one estate agent said: “It‘s cheaper to build 30 houses on one site, than 30 houses on all different sites.”

However, densification can put added pressure on municipal services. In Lorraine, a suburb favoured by townhouse developers, a moratorium was placed on new developments last year while the Nelson Mandela Bay municipality determined the impact on the area.

Municipal spokesman Kupido Baron said the moratorium was still in place as the municipality was drawing up a “draft review” to determine the impact on services. He said roads and sewerage services were most affected.

Townhouse complexes are also extending into the township areas, such as the 62-unit KwaDwesi Heights, developed by brothers Noman and Kamran Khan.

Kamran said township townhouses were a “booming market”, but one problem he experienced was that many potential buyers did not earn enough money, or were blacklisted and so couldn‘t apply for loans.

Elsi Snyman, the chief executive officer of Industry Insight, a company monitoring the construction market, said the Eastern Cape and KwaZulu Natal, both of which are experiencing a building boom, had initially “lagged” behind the rest of the country, which had now already moved into a decline.

However the boom has opened the province up to informal contractors looking to make a quick buck while the going is good.

East Cape Master Builders‘ Association executive director Greg Steele said in some cases townhouse complex developers were not formal contractors, and had decided to do the work of a contractor and onsite architect using labour “off the street”, resulting in problems later.

The boom has also affected the non-residential market where massive growth can be seen in shopping centre and warehouse space. It can also mean longer waiting periods, higher material costs and in some instances material shortages.

Snyman said while only 23% of contractors surveyed in the Eastern Cape during the past four months had experienced shortages of materials (the national average is 28%), this was up from figures of 12%, 17% and 18% in previous months‘ surveys. She said most common shortages were of cement and bricks.

Steele said imported products were competitively priced, keeping downward pressure on prices. He said the scarcest resource was skilled labour, which could delay the completion of projects.

“A formal contractor would have a contract in place, stipulating the time frames though. It‘s only when it is an informal project that projects become extended.”