SA Affordable Housing July / August 2021 | Page 24

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FINANCE MATTERS
programmes , which have been critical for providing access to the formal property market for low-income households , there is limited delivery of entry level properties financed by the private sector . This poses a serious challenge to working class South Africans and creates a gap of new supply for lower income families who want to become homeowners .
Despite the mortgage market being supportive of firsttime home buyers in 2020 , overall , mortgage activity favours the high end , with limited housing finance in the entry and affordable markets . Despite stated bank interest in the affordable market , there is little evidence of this in the numbers of affordable property transactions financed with a mortgage . There is great potential — especially in the resale market — for banks to expand their role down market and support the entry of first-time homeowners into the property market .
METRO SUPPORT FOR FIRST-TIME HOME BUYERS
Local municipalities can play a key role in assisting households to access mortgage finance and get a first step on the property ladder .
Given the importance of the resale market , replacing the practice of informal residential property transactions with formal transactions could provide an important supply of more affordable properties for first-time buyers . Leveraging the resale market for this purpose will require transaction support , including assistance with regularising title for
properties already informally traded , or which never received title in the first place . The Centre for Affordable Housing Finance in Africa ( CAHF ) and 71point4 have established a Transaction Support Centre ( TSC ) that has piloted the approach in Khayelitsha , Cape Town . Replicating and supporting the roll-out of this model in other areas could enable the development of working residential property markets for low-income South Africans , and for first-time home buyers in particular .
Area-based green lining can support mortgage and nonmortgage finance in low value areas and would open the market up for first-time buyers . This would require banks and lenders to collaborate with municipalities to boost investment in identified areas . Municipalities can play their part in terms of creating investable areas — through expedited plan approvals and rates clearances , targeted design of municipal rates policies , and the implementation of area-based improvement initiatives .
With the support of the Cities Support Programme , CAHF develops interactive dashboards and detailed reports analysing residential property markets in South Africa ’ s eight metros . For further analysis using title deeds data , and a note on the methodology applied , visit the CAHF website http :// housingfinanceafrica . org / projects / citymark-analysis-ofresidential-property-markets-in-south-africas-eight-metros /
ABOUT THE AUTHOR :
Maria Nkhonjerais a senior research manager at the Centre for Affordable Housing Finance in Africa ( CAHF ), where she contributes to sector monitoring and market intelligence in housing and housing finance . She has a special interest in the role of inclusive and innovative finance in African markets and has conducted evidence-based research across sectors in Southern and East Africa . Maria holds an MCom from the University of the Witwatersrand .
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22 JULY - AUGUST 2021 SAAffordHousing saaffordablehousingmag SA Affordable Housing www . saaffordablehousing . co . za