November 6, 2004

By Willem Steenkamp

Cape Town is developing at such a frenetic pace that the city is fast running out of building supplies such as bricks, cement and even cranes.

Building plans this year have increased by more than 70% on last year, which was already a record year.

And there is no let-up in new projects. In fact next year promises to be even busier on the construction front, with virtually no block in the central business district (CBD) left un-touched by new development. But it is not only the city centre that is experiencing unprecedented growth.

According to city planning director Japie Hugo, the huge property boom in Cape Town is clearly mirrored in the dramatic increase in the value of building plans approved.

He said over the past five years the total value of building plans approved jumped from R2.5 billion in 1999 to a record R5.5bn in 2003.

And now, based on plans approved over the past six months, projections are that plans to the value of a staggering R9.5bn will have been approved for the city by the end of this year. This is about 73% more than last year's record.

"The past six months (to the end of July 2004) was almost as high as the entire 2002. Building plans to the value of R8bn (40 904 plans) were submitted during the previous 12 months - that is one plan every three minutes of every working day," said Hugo.

Andrew Boraine, chief executive of the Cape Town Partnership, the organisation tasked with revitalising the city, said he had been told by developers around the city that the pace of development had put strain on the availability of building supplies.

Boraine said there was already a two week delay in getting supplies such as bricks and cement to construction sites.

"I am also told that we have virtually run out of construction cranes as developments continue to mushroom around the CBD and greater Cape Town. Of course even the shortage is ultimately excellent news because it not only highlights what is happening around the city, but these new developments create thousands of jobs and revitalise the local economy."

Boraine said that according to the latest information on projects in the city, there will probably "not be one street corner or city block that will not have some sort of building activity taking place on it by next year".

Developments in the city already run into billions of rands while several new projects that will take off in the new year are to be announced soon.

Colin Boyes, deputy director of the Cape Regional Chamber of Commerce, said the organisation was well aware of looming shortages in the construction industry.

"But we see this as a positive sign that indicates the tremendous pace of development. Our members are well capable of adjusting to meet the demands of the industry."

Boyes said the good news was that much of the development, and in particular job creation, was taking place in an industry where workers did not have to have high skill levels.

"This means that particularly those people who have for some time been excluded because of a lack of skills for particular jobs, can now be accommodated in the construction industry where such skills are not required.

"This means the boost in the economy is now also impacting in a positive way on those people who in the past were sidelined and could not get jobs."

Boyes confirmed that the construction industry had shown remarkable growth in recent times.

"We are currently facing some supply constraints, but the industry is very good at adapting to meet new demands and we have no doubt they will do what is required to meet the new challenges. Overall the tremendous pace of development is excellent news for our region."

Steve du Toit, building supply purchaser for one of the Western Cape's largest building material distributors, said shortages had been experienced in a range of building materials.

"We have experienced shortages in timber, roofing material and bricks where the demand is simply outstripping the supply. Of course this is good news because it shows the growth in the building industry.

"However, the downside is that prices could rise. It has not happened yet, but if the trend continues prices could well go up, particularly PVC pipes and other plastic building materials that are made from petroleum by-products."

Cape Town mayor Nomaindia Mfeketo, recently addressing the SA Property Owners' Association in the city, said the record pace of development was exciting news for the economy of the city as a whole.

"The figures of the unprecedented growth in our property market point to the fact that Cape Town is an exceptional place to invest. We are committed to making it even better. But we also know development is only sustainable - morally, socially and politically - if it works for all.

"The great majority of Capetonians have not enjoyed the gains in wealth and prosperity that have accrued to those with money and property in the course of the current property boom. We need to work together to change this in a fundamental way. This is not a nice-to-have or an add-on to business as usual.

"While I am the mayor of this city we will do everything we can to transform our city into a place that works for all. Our future prosperity and quality of life depends on it. We all have a vested interest in succeeding in this."