(500 000 HOUSING UNITS)INVESTMENT IN AFFORDABLE HOUSING
(R1,4 TRILLION 2010-2020)
RESIDENTIAL AND NON RES BPP AND
BUILDINGS COMPLETED (BC)
PRIMARY AND SECONDARY PROPERTY MARKET
R267 BILLION PA MORTGAGE ADVANCES PA
R1000 BIO MORTGAGES O/S
LISTED PROPERTY SECTOR MARKET CAPITALISATION
> R100 BILLION
ANNUAL HOUSINGNEED
(POP. GROWTH ONLY)250 000
INTEGRATED HOUSING
EMPLOYMENTIN BUILDING & CONSTRUCTION
> 1 000 000 PEOPLE
* When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF
PROPERTY OWNERSHIPENGINE FOR GROWTH
AND WEALTH CREATIONR3,8 TRILLION RES PROPERTY
R1,3 TRILLION NON RES PROPERTY
URBAN HOUSINGBACKLOG > 1,5 MILLION
UNITS IN 2010
GOVERNMENT INFRASTRUCTURE SPEND (R846 BILLION 2010-2020)
It is estimated that for every R1 spent on infrastructure, R1.40 is added to a country’s gross domestic product. PPP’s are the ideal vehicle for funding the gaps in infrastructure in Africa. (Deloittes research, May 2011)
Year on Year Growth Sector and Segment 2010 2011 2012 2013 2014 2015Total Private Residential -18.40% 2.90% 1.52% 6.95% 3.33% -6.45%Total Public Residential 26.79% 7.51% 1.07% -0.57% -6.11% -0.04%Total Residential 0.34% 5.32% 1.37% 4.50% 0.41% -4.59%
Total Private Non-Residential -24.19% -12.97% 2.44% 4.00% 8.06% 10.17%Total Public Non-Residential 21.07% -7.38% 9.14% 16.28% 3.90% -8.11%Total Non Residential 5.93% -8.72% 4.61% 8.16% 3.90% 3.98%
Total Unrecorded Additions & Alterations -3.88% 0.63% -2.75% -3.56% 13.05% 0.56%Total Investment In Building 1.53% -1.40% 0.01% 0.04% 0.04% 0.00%Total Investment In Construction 5.08% -12.07% -6.67% -16.88% 17.19% 0.67%Total Investment In Building and Construction 3.36% -6.99% -2.35% -5.41% 9.36% 0.02%
Total Private Non-Residential -24.19% -0.40% 2.44% 4.00% 8.06% 10.17%Total Public Non-Residential 21.07% 1.18% 9.14% 16.28% 3.90% -8.11%Total Non Residential 5.93% 0.80% 4.61% 8.16% 3.90% 3.98%
Total Unrecorded Additions & Alterations -3.88% 5.39% -2.75% -3.56% 13.05% 0.56%Total Investment In Building 1.53% 2.18% 0.01% 0.04% 0.04% 0.00%Total Investment In Construction 5.08% 1.16% -6.67% -16.88% 17.19% 0.67%Total Investment In Building and Construction 3.36% 1.65% -2.35% -5.41% 9.36% 0.02%
Year on Year Growth INVESTMENT IN BUILDING AND CONSTRUCTION: 2010-2015 (CONSTANT 2010 VALUES) (REVISED Q1 2011)
INVESTMENT IN BUILDING AND CONSTRUCTION: 2010-2015 (CONSTANT 2010 VALUES)
Conditions for High Road ScenarioInvestor Confidence:• High confidence;• Risk taking propensity • GDP growth > 6% pa;• CPI in 3-6% range;• Real Interest Rates < 5%;Investment Climate: • Property a preferred investment;• FTHB Subsidies increased to 2,5-5% of Budget;• The non residential market grows in tandem with residential; • Home improvement and non residential refurbishment markets grow at > 10% pa;• Private Sector Investment as a percentage of Total Investment in Building 50-60%;Property Delivery:• Building growth 2010-2020 at > 6,5% pa;• The R1,5 Trillion Affordable Housing programme successfully implemented;• Backlogs eliminated by 2020;• Construction growth 2108-2020 at > 7,5% pa;• The R846 Billion Government Infrastructure programme is successfully implemented
Conditions for High Road ScenarioInvestor Confidence:• High confidence;• Risk taking propensity • GDP growth > 6% pa;• CPI in 3-6% range;• Real Interest Rates < 5%;Investment Climate: • Property a preferred investment;• FTHB Subsidies increased to 2,5-5% of Budget;• The non residential market grows in tandem with residential; • Home improvement and non residential refurbishment markets grow at > 10% pa;• Private Sector Investment as a percentage of Total Investment in Building 50-60%;Property Delivery:• Building growth 2010-2020 at > 6,5% pa;• The R1,5 Trillion Affordable Housing programme successfully implemented;• Backlogs eliminated by 2020;• Construction growth 2108-2020 at > 7,5% pa;• The R846 Billion Government Infrastructure programme is successfully implemented
“ “ This is the ideal time to borrow and invest heavily in This is the ideal time to borrow and invest heavily in public infrastructure public infrastructure that has been badly neglected over that has been badly neglected over the past 30 years . . . Not only to roads and bridges but the past 30 years . . . Not only to roads and bridges but also to airports and air traffic control systems, urban also to airports and air traffic control systems, urban transit, high-speed rail, schools and university facilities, transit, high-speed rail, schools and university facilities, national laboratories, national parks, smart electric grids, national laboratories, national parks, smart electric grids, broadband networks, green generating plants and health broadband networks, green generating plants and health information networks.information networks.
This forward looking approach is This forward looking approach is best defined not as best defined not as deficit spending fuelling consumption deficit spending fuelling consumption but as an but as an investment for the future investment for the future with fiscal consolidation with fiscal consolidation achieved in a way that supports jobs and growth” (Gordon achieved in a way that supports jobs and growth” (Gordon Brown: 148: 2010)Brown: 148: 2010)
Conditions for High Road ScenarioInvestor Confidence:• High confidence;• Risk taking propensity • GDP growth > 6% pa;• CPI in 3-6% range;• Real Interest Rates < 5%;Investment Climate: • Property a preferred investment;• FTHB Subsidies increased to 2,5-5% of Budget;• The non residential market grows in tandem with residential; • Home improvement and non residential refurbishment markets grow at > 10% pa;• Private Sector Investment as a percentage of Total Investment in Building 50-60%;Property Delivery:• Building growth 2010-2020 at > 6,5% pa;• The R1,5 Trillion Affordable Housing programme successfully implemented;• Backlogs eliminated by 2020;• Construction growth 2108-2020 at > 7,5% pa;• The R846 Billion Government Infrastructure programme is successfully implemented
““Over the next three years government will spend Over the next three years government will spend R846 R846 billion on public infrastructure.billion on public infrastructure.On transport, we will maintain and expand our road On transport, we will maintain and expand our road network.network.We will ensure that our rail network is reliable, competitive We will ensure that our rail network is reliable, competitive and better integrated with our sea ports.and better integrated with our sea ports.” (President Jacob ” (President Jacob Zuma: State of the Nation Address: 2010)Zuma: State of the Nation Address: 2010)
““Economic Development Minister Ebrahim Patel put the Economic Development Minister Ebrahim Patel put the total annual expenditure on infrastructure over the next total annual expenditure on infrastructure over the next four years at four years at R250bn a year, translating into R1-trillion for R250bn a year, translating into R1-trillion for the period the period — an 18% increase on the state’s previous — an 18% increase on the state’s previous infrastructure spending estimate of about R846bn for the infrastructure spending estimate of about R846bn for the three years to 2013.three years to 2013.” (Business Day: 16 February 2011)” (Business Day: 16 February 2011)
16
STRATEGIC DRIFT AND REINVENTIONwww.strategicforum.co.za
Productive capacity
Alliances,Joint
Ventures
Cross functional
Networking
Enterprise Development,
BEE
Skills Training and Developmen
t
Leadership,Lobbying,Advocacy
Modeling cooperative behaviour
REINVENTION
The Hot Spot Scenario: mapping emergence(Based on Gratton: 2007: 145)
Building: The Engine for Growth and Wealth Creation. Property a preferred investment
Management Training and Development
INDUSTRY
Government Labour
The more peers we can bring online for the business of saving the world, the easier the effort will be, and in a sense, the stronger we will each be. (Ramo: 2009: 240)
Research has indicated that we can create jobs in six
priority areas. These are infrastructuredevelopment, agriculture, mining and beneficiation,
manufacturing, the green economy and tourism.
We cannot create these jobs alone. We have to work with business, labour and the communityconstituencies. (Pres Jacob Zuma: SONA: 2011)
17
What - the picture of the future we wish What - the picture of the future we wish to create (Abstract) (Looking out the to create (Abstract) (Looking out the window)window)
Why - the organisation’s answer to the Why - the organisation’s answer to the question question “ Why do we exist”“ Why do we exist” Purpose Purpose transcends the needs of shareholders transcends the needs of shareholders and employees. It seeks to contribute to and employees. It seeks to contribute to the world in some unique way, to add a the world in some unique way, to add a distinctive source of value. distinctive source of value. (Concrete) (Looking in the Mirror)(Concrete) (Looking in the Mirror)
How - do we want to act, consistent with How - do we want to act, consistent with our mission along the path towards our mission along the path towards achieving our vision ? (includes achieving our vision ? (includes openness, honesty, equal opportunity, openness, honesty, equal opportunity, merit, loyalty) Describes how the merit, loyalty) Describes how the company wants life to be on a day-to-company wants life to be on a day-to-day basis while pursuing the vision. day basis while pursuing the vision. (Senge: 1990)(Senge: 1990)
Values Values ==
Vision =Vision =
Mission Mission ==or or purposepurposeororContextContext
Based on extensive research, engagement and consultation, the National Planning commission (NPC) has identified nine challenges that constitute obstacles in meeting our objectives.
The challenges are:
1. Too few South Africans are employed;
2. the quality of education for most black people remains poor;
3. Poorly located, inadequate and poorly maintained infrastructure;
4. Spatial challenges continue to marginalise the poor;
5. South Africa's growth path is highly resource-intensive and hence unsustainable;
6. The ailing public health system confronts a massive disease burden;
7. The performance of the public service is uneven;
8. Corruption undermines state legitimacy and service delivery;
Based on extensive research, engagement and consultation, the National Planning commission (NPC) has identified nine challenges that constitute obstacles in meeting our objectives.
The challenges are:
1. Too few South Africans are employed;
2. the quality of education for most black people remains poor;
3. Poorly located, inadequate and poorly maintained infrastructure;
4. Spatial challenges continue to marginalise the poor;
5. South Africa's growth path is highly resource-intensive and hence unsustainable;
6. The ailing public health system confronts a massive disease burden;
7. The performance of the public service is uneven;
8. Corruption undermines state legitimacy and service delivery;
9. South Africa remains a divided society.
Malema may be the voice of reason rather than rhetoric.A GROUP of erudite intellectuals and a rabble-rousing politician with coruscating* political ambition may, on the face of it, make strange bedfellows, but there is a great deal in common between the diagnostic reports delivered by Trevor Manuel’s National Planning Commission and Julius Malema’s closing speech at the recent African National Congress (ANC) Youth League conference.
Stripped bare — the reports of their academic elegance and the speech of its bombast — both home in on the fact that race-based inequality threatens to push the economy and, indeed, the entire society over the precipice.
Manuel and Malema are giving us the same message. (Caroline Southey, former editor of the Financial Mail, 28 June 2011) * coruscate (korra skayt) to show brilliance or virtuosity
1. A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life.
2. People are united in diversity, recognising the common interest that binds us as a nation, and we have achieved greater equality for women in all aspects of life.
3. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.
4. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.
5. People who are able to work have access to jobs, workers’ rights are protected and the workforce is skilled.
6. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.
7. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.
8. Individuals and communities, at work and at play, embrace mutual respect and human solidarity.
9. Government, business and civil society work to build a better Africa and a better world.
1. A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life.
2. People are united in diversity, recognising the common interest that binds us as a nation, and we have achieved greater equality for women in all aspects of life.
3. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.
4. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.
5. People who are able to work have access to jobs, workers’ rights are protected and the workforce is skilled.
6. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.
7. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.
8. Individuals and communities, at work and at play, embrace mutual respect and human solidarity.
9. Government, business and civil society work to build a better Africa and a better world.
The Vision must be a dream and must be made much more compelling than what the NPC is trying to do in its 10 point plan (perhaps it is rather a mission?). Why not something like “together we increase sustainable welfare and quality of life of people” ? (Prof Stef Coetzee, Sakebeeld, 22 June 2011)
This is a well considered document that deserves the attention of all thinking South Africans. We need the political will to implement this and the plan which follows later in the year. (Prof Stef Coetzee, Sakebeeld, 22 June 2011)
DEVELOPING A NATIONAL VISION (A PROPOSAL)www.npconline.co.za
A democratic state, rooted in the values of the Constitution, working with all
sectors of society to improve the quality of life, build a better Africa and a better World.
This is achieved through:
1. High-quality education and health care, and adequate provision of housing, water, sanitation, energy and transport, give impetus to human development.
2. Natural wealth is harnessed sustainably, in a way that protects our environment, using science and modern technology to ensure a growing economy that benefits all.
3. People who are able to work have access to jobs,
4. Business is afforded an environment to invest and profit while promoting the common interests of the nation, including decent work.
5. An efficient state protects citizens, provides quality services and infrastructure, and gives leadership to national development.
6. Government, business and civil society work to build a better Africa and a better world.
The NPC plays a role mobilising society around a vision and a development plan. It does this through active engagement with the public, ensuring that experts’ views are canvassed on its proposals, and through a wide range of interactions. The commission has to carry out its functions representing all South Africans, taking into account their views irrespective of political outlook.
The NPC invites all South Africans to participate in this process to define a shared vision for our collective future.
The Building Industry leadership needs to engage with the NPC in order to contribute to the development of the National Vision for the Country and for the Building Industry.
Summarised MBSA Summit Decisions To investigate the establishment of a multi-representative Industry Forum that would meet 2 to 3 times per annum
To promote building as the Engine for Growth, nation building and wealth creation (through home ownership) by way of effective communication with leaders in all the economic sectors
To establish a Task Force to unpack the R846 billion infrastructure budgets and investment for all public sector work, including affordable housing; to determine the impediments to the delivery thereof; to ensure a constant work flow and uphold quality standards, measured against annually assessed programmes, and to explore and prioritise the effective implementation of national infrastructure maintenance strategies.
The formation of an inclusive forum to analyse the 8 000 projects within the Department of Human Settlements.
To maximise employment opportunities by correct retro-fitting of existing buildings; maximise reduction of carbon emissions, and pursue green best practice approaches for engineering services in line with” green building”. (February 2011)
?
Asking the right questions. Turning known unknowns into known knowns.
First step towards developing a Vision for the Industry?
Towards developing a Co-operative mindset and cross boundary networking for the Industry?
SLOGANBuilding: An engine of growth & wealth creation
REINVENTIONDoing well while
doing good.
REINVENTIONDoing well while
doing good.
YESTERDAY’S ECONOMY
TOMORROW’SECONOMY
NARROW FOCUS ON COMPANY
NARROW FOCUS ON COMPANY
BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES
BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES
Overarching vision aligned with National Issues and Vision, adapted and customised by Industry and organisations for their own vision and values.
BORROWBUY BURN
ENVIRONMENTALSUSTAINABILITY
SOCIALSUSTAINABILITY
ECONOMICSUSTAINABILITY
STRATEGIC RESPONSEwww.strategicforum.co.za
VISIONThe Building Industry is an engine for growth and wealth creation through redistribution, property development, ownership and investment.
MISSIONThe elimination of social backlogs and inequities is achieved through the provision of sustainable integrated developments, and providing skills, employment and entrepreneurial opportunities for growth.
VALUESThe Industry has an igniting vision, a culture, or mind set of co-operation, collaboration and cross-boundary networking; and the productive capability to deliver SUSTAINABLE Environmental, Social and Economic
solutions and based on the unashamedly ethical values and code of conduct of:• Ubuntu• Integrity• Respect • Accountability• Law abiding
