Low-cost housing supply is less than demand
Though there has been increased private sector interest in South Africa's affordable housing developments, the supply of low-income housing continues to lag behind demand because of capacity constraints, high risk and rising costs, said Cas Coovadia, managing director of the Banking Association of South Africa.
He was speaking at the launch of the International Housing Solutions (IHS) R7,2billion fund for investment into affordable housing schemes in emerging markets.
IHS managing director Soula Proxenos said that the shortage of affordable housing was not a phenomenon limited to South Africa.
"This isn't a South African problem, this is a problem we have worldwide," she said, adding that even in countries such as Ireland and the UK there were enormous backlogs.
Coovadia said that 132000 low-income houses needed to be built every year for the next five years to combat the shortfall, but that only 19000 were being built because of constraints on the supply side such as serious delays and inefficiencies in the servicing process at municipal level.
"In 2000 taking a piece of land and putting in the relevant bulk infrastructure to build a house used to take between 12 and 18 months. It's now taking between 30 and 59 months," Coovadia said.
"If we don't deal with these issues then the commercial risk increases, and finan-ciers and developers are not going to come into this market."