Builders cash in on cheap housing

Xolile Bhengu

Xolile Bhengu

Low-cost housing is turning into an inviting market. The demand continues to grow and the National Department of Housing estimates that 2,2million affordable homes need to be built by 2014.

Banks have committed themselves to make at least R42billion worth of mortgages to low-income families in the Financial Services Charter.

Already one building company aimed at this market, Sea Kay Holdings, has floated on the JSE alternative exchange (AltX), successfully placing 47,9million shares at R1 each.

Another company, RBA Housing, plans to list on AltX on September 20. It hopes to raise R65million through its AltX initial public offer.

RBA chief executive David Wentzel said that at least 132 low-cost housing specialists were needed.

Affordable houses are those that cost between R250000 and R700000. Although about 250000 are being built each year, there is a shortage of about 650000 of these houses.

RBA expects to build 1000 units this year, a pace it plans to double. The company has built 5000 homes to date.