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March 2015
News
H
e says that developers have
recognised the growing de-
mand for affordable housing
that is located close to newly devel-
oped roads or transport systems,
such as the Gautrain; the Rea Vaya
Bus Rapid Transit system in Gauteng;
and the MyCiti bus service in the
Western Cape.
“The provision of transport is
crucial in shaping purchasing and
renting decisions. Affordable housing
is driven by the availability of suitable
land and as this cost increases, so too
does the building of higher density
developments that can best optimise
these transport nodes.”
He adds that with forecasts sug-
gesting that 70% of South Africa’s
populationwill be urbanised by 2030,
there is an increased focus on how
best to accelerate the development
of public transport infrastructure
to reach other areas in major cities.
One such example is the south of
Johannesburg, which still has tracts
of under-developed land that can be
made available for affordable hous-
ing developments.
Annandale says in recent years
there has also been a notable trend
towards the lower income bracket
renting rather than buying afford-
able housing property. “When the
Nedbank affordable housing book
was established six years ago, these
developments soldout pretty quickly.
This has changed significantly over
the last few years, with rentals now
dominating and more than 60% of
units are being rented in develop-
ments that we are currently funding.”
He goes on to explain, “The issue
is that it can be difficult to prove af-
fordability for many buyers. Often up
to 30% of their disposable monthly
income can be absorbed by transport
costs, so to factor in rates and taxes,
as well as a bond payment, means
potential buyers may not qualify for
financing.” Annandale says that he ex-
pects the delivery of affordable hous-
ing developments to accelerate going
forward as Government continues to
release public-owned land. According
to recent announcements by theMin-
ister of Human Settlements, Lindiwe
Sisulu, the aim is to build 50 mega
projects that comprise of 2 000 and
4 000 new homes. This will roll out
over the next five years as part of
national government’s social contract
with the private sector across all
spheres of business.
“One of the mechanisms through
which this deliverywill be accelerated
is via Public-Private Partnerships
(PPPs) between government, devel-
opers and the banks. Government
subsequentlyworks closelywith large
developers to unlock tracts of land,
with the bank providing the funding,”
says Annandale.
He concludes, “There is an urgent
need in South Africa to deliver more
affordable housing tomeet the socio-
economic demands of the country
and we are confident that with all
stakeholders successfully working
together in a collaborative manner,
wewill continue tomeet this pressing
requirement.”
■
New transport nodes accelerates housing delivery
The establishment of transport nodes across South Africa has resulted
in awave of newaffordable housing developments being built in close
proximity, according to Manie Annandale, Head: Nedbank Corporate
Property Finance’s Affordable Housing Development Unit.