Government, developers opening more doors to formal, affordable housing
Affordable housing is starting to become a real priority for government and developers as programmes, subsidies, and new property ownership opportunities come to fruition.
New estates being developed in townships like Soweto and Alexandra are just one example of this commitment, while Flisp (Finance-linked Individual Subsidy Programme) is helping many first-time buyers afford to own properties.
Rent2buy is another concept that is opening doors to formal, but affordable, housing.
Read our latest Property360 Digital magazine below
Writing in Rode’s Report on the South African Property Market for Q3 2022, Meyer de Waal, director of MDW Inc, says the country needs to enlarge its middle class and house as many households as possible in formal shelters. And contributing to this objective is the Rent2buy concept that began in 2007.
“Over the years, the concept has been expanded with new services, product development, industry knowledge, experience, FinTech, and PropertyTech solutions. These innovations all form part of the basis of a unique and comprehensive deferred home ownership solution offered in Bredasdorp, namely the Mill Park Development.”
He explains that the Department of Human Settlements amended the National Housing Code in October 2021 to update the financial interventions for the existing Flisp programme. As such, the Housing Code now reads ‘Help Me Buy a Home Scheme’.
“Previously, the Flisp subsidy was available only to beneficiaries who qualified for a mortgage bond from a financial institution. With the change in policy, the Flisp subsidy has been extended to non‐mortgage housing finance facilities. These include, among others, housing finance facilities other than loans – for example, instalment sales and rent-to-own agreements.
“The changes in the Flisp policy in the National Housing Code enable the Deferred Ownership concept to be applied as one of the non‐mortgage housing finance options,” De Waal says, adding that the Deferred Ownership concept is similar to the non‐mortgage housing finance solution – a “Rent to Own” agreement scheme.
Mill Park Development
Using the Mill Park Development as an example, he says it is a joint initiative between the Cape Agulhas Municipality, which provided the land, and the Western Cape Provincial Department of Human Settlements, which provided the funding from the Integrated Residential Development Programme.
This initiative will see 106 houses constructed, some of which will be sold directly in combination with a Flisp subsidy, while others will be part of the Deferred Ownership project, in which beneficiaries will be renting before the transfer to ownership. Two types of houses are available, including 2‐bedroom houses of 43m² priced at R467 600, and 3‐bedroom houses of 55m² priced at R590 950.
De Waal explains that buyers will enter into an option agreement to buy the property for which he or she qualifies, based on his or her credit profile and affordability.
“The Flisp subsidy for which the buyer will qualify is then taken into consideration to reduce the home loan amount or improve the purchase capacity of the buyer. A lease agreement is concluded as the buyer will first rent the property for a two‐year period, with the option to purchase the property once that period has expired.
“A unique feature of the Mill Park Deferred Ownership concept is that 50% of rental paid monthly will be saved for the buyer to use as a deposit when the property is bought. The purchase transaction is completed through the ‘exercise of the option’ to purchase, with a deed of sale that forms part of the sales pack.”
End‐user finance has already been approved, and six financial institutions are available to provide home loans to approved buyers, he says.
Blue Downs
The city of Cape Town’s Mayoral Committee today recommended to Council the land release of an erf in the Blue Downs vicinity for a mixed-use, integrated affordable housing development.
The well-located land parcel is approximately 26 000m² in size, and is intended to provide opportunities for a variety of housing options and types, says committee member for human settlements, Councillor Malusi Booi.
“This includes multi-storey apartments, units that are financed through the Help Me Buy A Home/Finance-Linked Individual Subsidy programme for first-time home buyers, and serviced sites to enable greater access to affordable housing for those earning below R22 000 per month.
“‘The plans for the site include social, recreational, service and retail/commercial uses that are crucial to healthy, well-performing neighbourhoods. There is much work to be done to realise our vision for this land but we are utterly committed to creating inclusive, integrated neighbourhoods here and across the metro.”
Frankenwald
One of the latest developments in Alexandra township is Calgro M3's Frankenwald integrated development. The residential development, which could see up to 30 000 housing units constructed, will stretch from Kelvin in Sandton to Alexandra township.
The developer aims to start with at least 20 000 residential units that will cater for different income groups –from fully state-subsidised RDP houses to stand-alone houses for about R1 million.
“Frankenwald, situated next to Alexandra and the Marlboro Gautrain station, is the last remaining large-scale property in the greater Sandton area,” states the company in its 2022 Annual Integrated Report.
“Calgro M3 holds an option to acquire the parcel of land in partnership with a major third-party commercial property developer. Other than the annual option fee, no material financial commitments are planned for this project for the next year. Calgro M3 is planning to commence some government funded bulk and link infrastructure towards the end of next year.”
Jabulani Junction
In Soweto, a number of lifestyle estates are also being developed, one of which is the Jabulani Junction which is Flisp-registered. Also developed by Calgro M3, the estate will offer stylish and upmarket two-bedroom sectional title homes in the CBD of Soweto. Fenced with access control, the fibre-ready apartments boast high-quality finishes, prepaid electricity, green energy solar geyser, one bathroom, and large 500mm floor tiling throughout in neutral but fresh colours.
“All spaces have modern light fittings with imported taps and sanitary ware,” the company states.
“The kitchen is tastefully finished with quartz worktops, a double sink, and fitted for two appliances with contemporary cupboards. At 41m², the units are well designed with ample light through aluminium windows furnished with burglar bars on all opening windows. There is a covered parking bay for every unit.”
Jabulani Junction will be a secure hub with a 24-hour manned gatehouse equipped with a biometric access control system. The estate will have its own clubhouse, pavilion, and multi-purpose sports field as well as a running and walking trail.”
Orlando Towers Estates
Another new property project in South Africa’s largest township is part of an investment drive aimed at converting the area surrounding the Orlando Dam and the Orlando Towers into a sought-after growth node.
The one-of-a-kind cluster of lifestyle estates – Orlando Towers Estates – to be developed next to the famed Orlando Towers, will produce more than 2 800 quality two- and three-bedrooms apartments in four secure estates over the next five years.
Launched in June, the estate is not only primely located, but also boasts top-tier lifestyle facilities including biometric access, a football pitch, kids’ play areas, braai pods, a clubhouse facility, fibre network, resident parking bays, and gas utilities. And it is affordable, with prices starting at R670 575 for a two-bedroom apartment.
The estate is located less than 4km from Maponya Mall, and 2km from Chris Hani Baragwanath Hospital and the University of Johannesburg. Furthermore, Bara Mall is right across the road.
The aim of this development is to empower the community through attaining property assets that will appreciate in value due to the prime location, say Derek Steyn and Louis Barnard who lead the development team.
IOL BUSINESS