the banking association south africa

The Banking AssociationThe Banking AssociationSouth AfricaSouth Africa

WORLD BANK CONFERENCE ON

Housing Finance Systems in Emerging Economies

2nd World Bank Group Conference

15 March 2006

The Rise of Housing The Rise of Housing

Finance: Opportunities Finance: Opportunities

and Challenges and Challenges

in South Africain South Africa

Cas CoovadiaBanking Association , SA

1,698,788 houses built for low-income people since 1994

Budgetary allocation:

SOME STATISTICSSOME STATISTICS


YEAR RAND VALUE DOLLAR VALUE

2006 R6 860 883.00 $1.1 billion

2007 R8 575 608.00 $1.4 billion

2008 R9 450 890.00 $1.5 billion

R23 billion ($3.72 billion) allocated for housing subsidies for 500 000 units for next 3 years

Transfer duty abolished for houses under R500,000 ($81 000) – Budget 2006

SOME STATISTICS - contSOME STATISTICS - cont

About 7 million households unable to afford credit for housing

Backlog of 600 000 units amongst those earning between R1500-R7500 per month ($243-$1215)

Need delivery of about 133 000 units per year in next 5 years to meet 60% of backlog

Only 15 000 units per year being built currently


FINANCIAL SECTOR CHARTERFINANCIAL SECTOR CHARTER

Banking sector strategy for transformation and broad-based black economic empowerment (BBBEE)

Commitment of R42 billion ($6.8 billion) over 5 years

Sector has issued loans in last 2 years of R17 billion ($2.75 billion)

Project Sizwe


PROJECT SIZWEPROJECT SIZWE

Housing initiative: banking sector/government

Transformation of low-income housing market

Elements:•Consumer education•Making subsidies efficient• Fixed-rate mortgage/conduit• Loss insurer


CONCLUSIONCONCLUSION

Supply-side challenge• Make land registration and servicing

more efficient• Improve municipal government

efficiency• Reduce holding costs• Incentivise developers

Public, private partnership (PPP)

Government support critical


the banking association south africa

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