SA Affordable Housing July / August 2017 // Issue: 65 | Page 28

FEATURES “It is about playing in the sector the banks are interested in,” says development manager, Jacques van Embden. He also says that the affordability of the market place also plays a role. One of the aspects banks are interested in is residential developments located in urban areas. The National Housing Finance Corporation (NHFC), also emphasises on financing workable models. The corporation’s end-beneficiary target market is the low- to middle-income household also known as the ’gap’ market. NHFC provides project finance in the form of a project development loan facility, which converts to a long-term loan facility on the completion of construction of a social housing project. Finance may be provided to a developer who either seeks to develop a housing project or seeks to buy and/or refurbish existing buildings; or for Greenfields housing developments for affordable rental or sale purposes. ‘To create a robust sustainable housing finance market in South Africa, partnerships at the development, wholesale and retail levels are needed to provide innovative and affordable housing finance products and varied housing stock options,’ it states. Old Mutual also provides financing for the affordable housing market through the Housing Impact Fund South Africa (HIFSA). ‘The fund invests in all aspects of the housing value chain, from the physical development of housing through to mortgage and incremental housing finance,’ it says. Some of the projects it’s funded include Karino Lifestyle Estate in Mbombela, Mpumalanga, Azaadville Gardens in Randfontein and Savanna City located 35km south of Johannesburg. These are projects that are in urban areas close to major roads and public facilities. The economic climate, among other reasons, is why investors are cautious to invest. Despite this, Propertygate Development and Investment PLC’s managing director and chief executive office Adetokunbo Ajayi advocates the use of Real Estates Investment Trusts (REITS) as a potent window for enhanced financing of real estate investment. “Instead of dedicating their time to approach foreign investors who need a lot of persuasion before they come on board; the players in the continent should look inward to relieve the dependence on foreign funding.” He advises developers to explore funding opportunities in areas such as pension funds, insurance companies and the capital market by leveraging REITs. THE GIST OF IT ALL The need to own your own home has grown over the years, hence people who usually weren’t considered for homeownership are now being included. Attending to this need requires funding and it doesn’t come easily. Froom says that confidence and believing in your product can help in securing an investor. “If you believe in your product, nothing can stop you,” he says. Van Embden says that to secure banking finance you must ensure that the funding works. Profitability of the business model should come from how units are sold and must be market related. “If that doesn’t come together, it won’t be financed by investors,” he says. Depending on the kind of ownership the developers are selling, they may or may not have buy-in from the banks. Our unique skins transform ordinary doors into portals of style and sophistication. Open to colour, open to finish, open to choice 2 Panel White 4 Panel White Country West 6 Panel White We know you want style and quality at an affordable price. We have a range of quality moulded door skins for hollow core doors available in a wide range of assorted colours, patterns and designs to suit your decor. Easy to apply, easy to maintain FinDoor requires no varnish, no sealer and no paint, making it 100% maintenance free. Black Ash Mahogany D/Curve Diamonds Cherry Melrose City Oak not all doors have to be made the same... www.findoors.co.za Mohamed 083 895 8010 | Preedip 072 424 7869 | [email protected] | Fahiem 082 786 9021 | [email protected]