Houses for Africa: possibilities & pitfalls

There is no more grounding and comforting place in our lives than our homes. It is the fundament for living and lifestyle. It is the very core of existence for many people - whether the structure is large or small. When people do not have security of shelter and right of tenure, this becomes bigger than just a social-economic problem - it represents loss of identity, self-esteem, family, and relevance in an indifferent world.  

The housing dilemma facing many countries has emerged from the rise of populations and the ever-escalating costs of providing homes fast enough to meet the demand. In Africa the problem looms large. Lack of housing stock is creating a vicious circle of rising purchase and rental costs. Borrowing for ambitious projects has, in many instances, become too expensive for affordable housing developers.

However, there are strategies to mobilise private capital so that infrastructure vital to promoting economic development in emerging economies will actually get built. Few endeavours can be of greater humanitarian, economic or social benefit than providing durable housing to people on modest and lower incomes.

African solutions

Traditionally, many sub-Saharan homes have been typically built with mud, wood, plants, straw, clay, and sheet metal. But today there are new and innovative strides to present homes built with more enduring materials such as:

• Ceilings and roofs of fibre cement and glasswool insulation, as well as plasters and plasterboards that help to reduce unwanted heat losses or gains, and unwanted interior condensation.
• Glass windows that facilitate light or block it. Solar control window films are providing flexible solutions to improve thermal comfort, filtering solar energy as needed.
• Drywall systems can be speedily constructed, and enhance the thermal performance of the building envelope, supporting the interior temperature comfort of the occupants, and reducing noise. Thermal conductivity of plasterboard is up to four times less than that of brickwork.

South Africa: the growth of township property development entrepreneurs

"We are looking at contractors, construction companies, and a host of other professional services such as consultants, lawyers and estate agents in the communities, who have also thrived in this new market." ~ Robert McGaffin, UCT Nedbank Urban Real Estate Research Unit.

Many opportunity-driven local developers are following a formal property development process, creating high quality, multi-unit dwellings which specifically target the rental market. Their aim is to target those households earning too much to qualify for state-subsidised housing, but who are struggling to find safe and affordable housing in the private market.

Those investors with an eye for the business opportunities that abound in the vast and fast-emerging sub-economic property market in South Africa, have contributed to the rise of small development enterprises through their support of local developers who engage with skilled community members to build the units.

Yet, despite this proven demand, traditional property finance providers and banks are still wary of affording the essential finance products that will enable and support these developers. Concerns include: potential for defaults; construction risks; security required for providing home loans.

While these concerns are understandable, it means that potential investors unfortunately remain wary of these potential drawbacks. To create a more enabling environment for micro-developers requires funders who are able to take a longer term, more developmental perspective. Fortunately, some organisations are stepping up to give micro-developers a chance, using innovative approaches that combine access to financing supported by strong networks, training, and advice.

• The Trust for Urban Housing Finance (TUHF) provides micro-developers with tailor made mortgage loan facilities, training and mentorship to help them achieve their goals.
• The Development Action Group (DAG) is working with local developers to develop affordable medium-density rental accommodation.
• Hustlenomics, winner of the SAB Foundation for Social Innovation and Disability Empowerment Awards 2018, provides low income families with informal backyard shacks, the opportunity to build more durable structures in their place.

Considering population growth and the consequent pressing demands for affordable housing, it makes sense to seek innovative models and craft effective solutions within communities that will ultimately carry good financial returns for those with the foresight and to take this vital and exciting investment path into the future of homes for Africa.

The Leapfrog Property Group

Leapfrog Property Group offers a fresh and innovative approach to buying, selling, renting and property investments, ensuring the best property deals for clients across South Africa. Our agents are qualified, trained, experienced; our approach bold and spirited, driven by heart, generosity and honesty. It is our mission to advise, eliminate obstacles and save you unnecessary expense. Trust is our watchword. And value our motto. Armed with our combined credentials, we are the bright face of excellence in the South African market.