Banks to spend billions on cheaper houses

Xolile Bhengu

Xolile Bhengu

Banks plan to have spent close to R47billion to finance mortgage loans for the affordable housing market by the end of the year.

The Banking Association of South Africa said the local four major banks had spent R39,6billion by the end of March to finance new homes and home improvement loans for the affordable housing market.

The association said banks were well on target to meet the December 2008 deadline to spend R42billion earmarked to finance the market.

An example of affordable housing efforts by banks is the mixed use Cosmo City, at Kya Sands, north of Johannesburg, which on completion will have 12500 housing units, made up of fully and partially subsidised dwellings, rental apartments and bonded houses.

The houses aimed at civil servant employees such as teachers, nurses and police, cost between R180000 and R250000 in 2006. Today some of the properties are worth more than R350000.

The association's Financial Services Charter housing co-ordinator, Pierre Venter said two thirds of the R39,6billion spend was to finance new houses and the remaining third was spent on home improvements.

The association said it was encouraged by achievements despite the challenges that the financial services sector faced. It also said it was happy with Eskom's announcement that affordable housing would not be affected by the curb of power supply for new developments.