Affordable housing market shortage or gap market

Affordable housing market shortage or gap market

 
affordable_Housing

Affordable Housing


STANDARD Bank’s home loan book for the affordable housing market grew by 30% to R14bn last year, driven by strong demand as first-time buyers entered the market.

There is an estimated shortage of about 600,000 houses in the affordable market, although Standard Bank affordable housing head Nicholas Nkosi said on Tuesday that the bank was "very encouraged" by initiatives to ramp up supply.

The affordable segment, which Mr Nkosi said was the most active part of the housing market, refers to houses between R300,000 and R550,000, with the average bond worth about R350,000.
Concern about low-income earners’ access to the affordable market has prompted the government to put various initiatives in place to unlock the "gap market" — people who do not qualify either for loans or free government houses.

Measures include the finance-linked individual subsidy programme, which aims to reduce the initial home loan amount to make monthly instalments affordable.
Standard Bank said last week that it had R2bn of funding set aside to develop affordable housing.
Mr Nkosi said there were now "more home owners in the formal sector than ever before", with many South Africans having bonds for the first time. This was a significant development as "property ownership is really part of wealth creation — especially in this market".
Many people were realising that they could afford to buy a house given the favourable interest rates.
"It certainly doesn’t make any economic sense for them to continue renting, and they’re more comfortable now that they will be able to continue paying those instalments over time," Mr Nkosi said.
The rapid growth of Standard Bank’s home loan book for the affordable housing market was driven by the bank’s strategy and strong demand.
However, the increasing cost of land and building in South Africa, particularly in areas close to places of work, was "a challenge", although the people being targeted were reviewing their expectations. "People are happy to go into a smaller home with the intention of extending it later on," Mr Nkosi said.
The biggest issue in the affordable segment was not the ability of people to qualify for finance, but "the availability of stock that they can afford", although more stock was entering the market and developers were showing increasing interest.
Nedbank affordable housing head Jeff Lawrence said last month that there was "huge demand for affordable housing", although many people could not access financing.

How to address the backlog of affordable housing? Visit www.moladi.com

Keywords - Affordable housing,  market-shortage, first-time buyers, finance, shortage, backlog, quality, affordability, individual subsidy programme, subsidy programme, gap market, moladi

Popular posts from this blog

Brick and Mortar vs. Injection Moulded Construction System - moladi

Superior building construction method | Disrupting the mould

How to reduce the cost of housing construction?