An innovative joint venture between an estate agency, construction group and investment company will see billions of rands being pumped into affordable housing projects in a bid to broaden home ownership and wealth development.
Acutts Motlekar, a joint venture between the Acutts Property Group, African investment holding company Motlekar Holdings, and construction company Group Five, aims to bring several thousand housing units to market each year.
This conservatively translates into a multibillion-rand injection to the local economy with spin-offs and job creation expected in land surveying, architecture, building and construction, material delivery and administration. The initiative will also promote employment in the selling, mortgage origination and property transfer value chain.
The properties will be geared towards buyers in the affordable housing segment, typically households earning R8 000 to R15 000 monthly to secure bonds between R290 000 and R500 000. The new suburbs will correspond with government’s proposed economic zone requirements for newly-establishing commercial centres.
Government housing focuses on households earning below R3 500 a month, while private sector development cater to the country’s top 10% of earners who receive more than R20 000 a month.
The initial project, the 450-unit Crystal Park, was launched in Benoni in May and further projects are planned, targeting Midrand first.
Each suburb will range between 600 and 5 000 houses to effect the delivery of quality houses to communities. The consequential spin-off will involve the development of schools, shopping centres, health facilities and transport initiatives which form part of the pre-planning phases in terms of getting the development areas approved. For example, if the number of schools currently available could not handle 5 000 new homes, then approvals would only be granted for the capacity in that region.
Acutts Motlekar director Pat Acutt says that SA’s financial institutions are committed to providing mortgage finance to the affordable housing segment. The developments will have a streamlined credit approval and bond calculation system on-site to assist potential buyers.
Acutt says that the banks would typically grant bonds, but the joint venture had also made arrangements with Old Mutual via its Development Impact Funds, specialist financial services company Mettle and specialist home loan group Integer.
The Old Mutual Development Impact Funds South Africa specifically provides opportunities to invest in assets benefiting disadvantaged individuals and communities, while generating commercially accepted returns on investment. The underlying investments primarily focus on stimulating the supply of affordable housing and related infrastructure and on increasing access to housing finance for lower-income households.