Affordable housing shortage 'stifles market'

Affordable housing shortage 'stifles market' - South Africa

Lack of affordable housing was a major obstacle to sustained demand in the housing sector and could lead to the slowing of house price growth to single digits later this year, a property group said yesterday."Without growing demand, price growth will decline," Harcourts Africa said. Chief executive Martin Schultheiss said the South African market's greatest need was in the essential buying category. "People need an affordable roof over their heads, as opposed to leisure or speculative buying."It was not only essential that greater volumes of affordable units were brought to market, not only for prospective owner-buyers but also for the affordable rental market, where better stock levels would spur greater investment."The household sector remains under pressure, with the latest figures showing the ratio of debt to disposable income still at nearly 80 percent," Schultheiss said. While this painted a rather bleak picture for prospective home owners, especially at the lowest end of the market, it also meant that they would be looking for affordable rental homes if they could not muster the finances to buy their own.

"Developers would do well to take note of this need and adapt development plans to cater for this sector."Although affordability is a common denominator, property investors are also looking for additional features - and developers who want to tap into this market should take heed."Schultheiss said investors wanted compact properties with easy access and hard-wearing surfaces for easy maintenance. "Tenants typically occupy units for an average of two years and landlords are keen to keep refurbishment costs to a minimum at the end of a lease period."Investors might also prefer built-in appliances and pre-paid meters for electricity. "And of course affordable units with low maintenance requirements would find favour among owner-buyers too," he added.

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