Affordable housing sector continues to bloom

Private Property South Africa
Private Property Reporter

Despite affordability being a key concern in the middle to upper echelons of the property market, with a definite decrease in sales activity, the same cannot be said of the affordable housing market. Says Deon Lessing, marketing director of Betterbond: “This is a sector of the market that should not be overlooked as the current economy has not deterred sales activity to the same extent here.”

Silumko Mayaba, head of affordable housing at ABSA says it is important to note that the levels of demand for affordable housing have, to a certain extent, cushioned the levels of negative growth in this specific sector. This has therefore made negative growth in the affordable housing segment of the market less pronounced than in the other sectors of the property market.

Lessing says that the solid activity and movement in this segment of the market, partly due to interest rate decreases, is sure to be spurred on in light of the recent interest rate announcement meaning a drop of 500 basis points since December last year.

In addition to this, Lessing points towards local financial institutions which have introduced products specifically packaged for properties in the R400 000 and less price bracket. For example, ABSA’s My Home 110% Mortgage Loan offering where the total purchase price of the house and associated bond registration costs are covered. Packages such as these make it easier for potential buyers earning R11 000 per month in either a single or joint income bracket to obtain a home loan.

An interesting trend in the affordable housing sector is the positive market response towards home improvements and extensions. “Hence ABSA’s secondary market campaign aimed at providing homeowners with tailor-made, affordable and hassle-free financial solutions which enable them to improve their township properties,” notes Mayaba, who adds that ABSA has partnered with government to assist in the delivery on housing in this market segment.

Lessing welcomes initiatives such as these that support further growth in this segment of the local property market. Both Betterbond and ABSA foresee strong growth potential in the affordable housing sector for the next five years.

Issued by Green Grapes Communications on behalf of Betterbond

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