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The Banking Association South Africa

The Banking Association South Africa. WORLD BANK CONFERENCE ON Housing Finance Systems in Emerging Economies  2 nd World Bank Group Conference 15 March 2006. The Rise of Housing Finance: Opportunities and Challenges in South Africa. Cas Coovadia Banking Association , SA.

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The Banking Association South Africa

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  1. The Banking AssociationSouth Africa WORLD BANK CONFERENCE ON Housing Finance Systems in Emerging Economies  2nd World Bank Group Conference 15 March 2006

  2. The Rise of Housing Finance: Opportunities and Challenges in South Africa Cas Coovadia Banking Association , SA

  3. SOME STATISTICS • 1,698,788 houses built for low-income people since 1994 • Budgetary allocation: • 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 Cas Coovadia Banking Association , SA

  4. SOME 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 Cas Coovadia Banking Association , SA

  5. FINANCIAL 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 Cas Coovadia Banking Association , SA

  6. PROJECT SIZWE • Housing initiative: banking sector/government • Transformation of low-income housing market • Elements: • Consumer education • Making subsidies efficient • Fixed-rate mortgage/conduit • Loss insurer Cas Coovadia Banking Association , SA

  7. CONCLUSION • 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 Cas Coovadia Banking Association , SA

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