South Africa’s first Eco Home Loan

South Africa’s first Eco Home Loan

Private Property South Africa
Kerry Dimmer

One of the key residential market trends in South Africa has been the move away from freehold homes into estate or complex living, largely because they offer increased security, and a sense of community. When you add to that list, the option of ‘green’ or ‘eco’, the appeal morphs into heightened desirability, attracting particularly environmentally-conscious buyers who respond to the value offered by green homes.

This is the reason that Absa, in collaboration with Balwin Properties partnered to deliver South Africa’s first green bond, the Absa Eco Home Loan. “The idea was inspired by Steve Brookes, the CEO of Balwin who is passionate about building sustainable developments and state of the art architecture,” says Nondumiso Ncapai, Head of Product at Absa Home Loans.

“Balwin looked at what could be achieved with climate-smart investment and made the decision to partner with Absa based on our progressive approach to new products and offerings that are centred on customer needs. Largely our customers want to embrace sustainable living, which along with our ambition to ‘House the Nation and Shape the Industry in a Meaningful Way’ philosophy means we could, with Balwin, truly commit to changing lifestyles now , and into the future.”

By June 2019, Balwin had already registered some 16 000 units across seven of its built-to-sell developments with the Green Building Council of South Africa (GBCSA), receiving an EDGE certification. EDGE is a rating tool that measures and proves the financial case for building green, and is set at a minimum of 20% reduction across energy consumption, water usage and embodied energy in building materials. At the time, Balwin Properties registration of the units was a global first in that it covered more homes than any other property developer in the world.

“EDGE presents a cost-effective planning tool that helps us to build green-based homes based on occupant behaviour, building type and of course, our local climate. Environmentally-conscious buyers and tenants have the assurance therefore that they are minimising their own environmental footprint while saving on their utility expenses over the long-term,” says Ncapai.

There are currently four approved Absa Eco Home Loan developments: The Reid and Polo Fields in Johannesburg, The Blyde in Pretoria, and De Zicht in Cape Town. The Absa Eco Home Loan proposition relevant to these estates is not unlike any other ordinary home loan application in that qualification requires a risk profile assessment; however, the Eco Home Loan comes with an additional rate concession on the customer’s interest rate. When you factor in that lockdown resulted in a number of interest rate decreases, this option looks very attractive and could save a buyer thousands of Rands over the long term.

“We made sure that the Eco Home Loan benefits could be coupled with any of our other Absa Home Loan propositions, so that the customer didn’t have to choose, but could get all the benefits they were eligible for. We also expanded the advantages of the Eco Home Loan proposition to those who are members of our Absa Rewards programme and have a transactional account with Absa,” says Ncapai.

“This means that a purchase of a unit in one of the Balwin eco estates, also qualifies our Absa Rewards members for a 10% cash-back on their MyTelnet home connectivity product and service, and access to Absa financial planning consultants, be that on savings and investments, insurance and risk protection, retirement planning or wills and trusts.”

How the Absa Eco Home Loan works

Ncapai says that the customer should visit one of “these beautiful energy-efficient estates” and identify a unit they would like to purchase, noting that each is fitted with free eco-friendly appliances from Balwin. The customer will then put in an offer to purchase with Balwin. Balwin will thereafter submit the customer’s application for a home loan to Absa. “The additional interest rate discount is applied to those that meet Absa’s risk criteria. Monthly repayments are calculated, along with associated costs, and applicable interest rate over an agreed term of the loan.”

As with all home loans, the Absa Eco Home Loan bond is registered and transferred, with the loan amount paid to the seller/developer on registration.

Charges that can be expected include an initiation fee for processing the application, valuation and the establishment of the home loan account; and a monthly administration, or service fee.

Want to know if you qualify before you apply?

If you are currently in the market for property that offers sustainable living, begin the journey by determining what you could qualify for, in under 15 minutes, by using the Absa Home Loan pre-qualification tool, the Absa Home Loan Estimator. This tool is accessible from the Absa website and for Android smartphones, the Absa Homeowner App can be downloaded from the Google play store.

Living in a Balwin development

A luxurious development set in the exclusive Waterfall area of Johannesburg, Polo Fields, boasts superior architecture. This upmarket estate boasts a lifestyle centre with various services, inclusive of: eco-friendly car-wash, concierge service, cinema, swimming pool, gym, a spa, and free wi-fi. Each fibre-ready Polo Fields apartment includes: state-of-the-art SMEG appliances, modern practical finishes, and prepaid gas, electricity and water meters, enhanced by stunning north-east views over the scenic Waterfall area.

The Reid, a lifestyle estate set in the northern suburbs of Johannesburg was inspired by modern family life. The Reid offers urban living surrounded by natural beauty. The wi-fi- ready apartments include free eco-friendly appliances, solar-supplemented electricity plus pre-paid electricity and water meters. The on-site 6 Star Graded Lifestyle Centre features cutting-edge leisure and sport facilities including a swimming pool, gym, a health and beauty spa and restaurant.

With views of Table Mountain and in close proximity to Durbanville wine route, De Zicht is located in the beautiful city of Cape Town. The lifestyle centre features a mini sports fields, a spa, vitality approved gym and swimming pool. Each apartment is fibre-ready, includes free eco-friendly appliances, prepaid utility meters and a Scandinavian-styled kitchen. The estate is solar supplemented and boasts a wide range of leisure, entertainment and sport facilities.

The Blyde in sunny Pretoria is a South African first. This unique development includes a beach-like crystal-clear sustainable lagoon to facilitate an array of water sports such as swimming, kayaking and paddle-boarding. Along with the on-site Lifestyle Centre and its many leisure facilities, The Blyde has something for every family member. The apartments come standard with free appliances, prepaid utilities and the quality finishes Balwin is renowned for, and state-of-the-art security.

Conditions

“Only purchasers of Balwin Properties units within the estates of The Reid, Polo Fields, The Blyde and De Zicht and who meet the risk assessment criteria are eligible for the Absa Eco Home Loan,” confirms Ncapai. “We are however very encouraged by the feedback and excitement we have received from the market , and are looking at ways to add even more value to this proposition.

“Absa recognises that sustainable living is a priority, and that it is the future of residential estates. It also aligns with our role as a responsible corporate citizen and how we embrace initiatives that support the reduction of carbon emissions and climate change effects on our environment. We are proud to contribute to making our society and the housing sector a valuable and sustainable home for the future.”

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