Download South Africa - National Association of Home Builders

STATE OF THE HOUSING INDUSTRY:
SOUTH AFRICA
J. Bayat
NHBRC
IHA Secretariat
STATE OF THE HOUSING INDUSTRY IN SOUTH
AFRICA.
2
COUNTRY: SOUTH AFRICA
NAME OF ORGANIZATION: NHBRC
ORGANIZATION OVERVIEW:
The National Home Building Registration Council (NHBRC) is a state entity that
was established in terms of the Housing Consumers Protection Measures Act,
(Act 95 of 1998) to regulate the building industry and protect housing
consumers.
The NHBRC Mandate
3
The Mandate of NHBRC is:
•
•
•
to regulate the home building industry;
to establish and promote ethical and technical
standards in the home building industry and
to improve structural quality in the interests of
housing consumers and the home building
industry.
STATE OF THE HOUSING INDUSTRY IN SOUTH
AFRICA.
4
HOUSING ECONOMIC STATISTICS:
Starts:
- Single Family
- Multifamily
Gross Domestic Product (GDP)
GDP Growth
GDP Per Capita
House Price Index
Consumer Price Index
Unemployment
Home Mortgage Interest Rate
Home Ownership Rate
Population Growth/Net
Percentages:
1%
5%
Numbers:
5,526
22,107
$312.80 bn
1.2%
$7,575
5.2%
6.30%
26.6%
10.50%
77%
55.12m
STATUS OF SOCIAL HOUSING IN SOUTH AFRICA
5


In South Africa, Social Housing specifically refers to
rental or co-operative housing for low to medium
income households (R1 500 - R7 500), in the form of
medium to high-density flat units, providing good
quality rental accommodation for the upper end of the
low income market.
At the end of the 2014/15 financial year, 20,447
houses constructed.
Source: SHRA
DISTRIBUTION OF HOUSING TENURE
Other
3%
Owned
but not yet
paid off
12%
Occupied
rent-free
19%
Rented
25%
Owned
and fully
paid off
41%
THE RENTAL SECTOR IN SOUTH AFRICA
Social Housing
Public
Community
Residential Units
Institutional
Rental Sector
Backyard



Over 2,3m people rent in
SA
Of these at least 75% earn
R7,5k and below
Demand for rental in this
category is at the
average of 120 000 units
per annum
Private
Inner City
City & Suburban
RENTAL DWELLING TYPES
Flats or
apartments ,
16%
Room/flat-let not in
backyard, 3%
House/flat/ room in
backyard, 8%
House or town-house, 45%
Worker's hostel, 8%
Shack in
backyard, 12%
Shack not in backyard, 6%
Other, 1%
About 20% of rented
dwellings are
shacks
Traditional dwelling, 2%
Formal
Informal
RENTAL CONTEXT
44% of people that rent earn between R1500 ($150) and
R7500 ($750 ) per month
The demand for rental units nationally is growing at a
rate of about 250 000 units per annum
In order to cater for the income category of between
R1500 to R7500, government needs to provide 110 000
units (44%) per annum
The great concern is the number of people earning
below R1500 which represents up to 50% of the
employed, who require some kind of rental solution.
How is social housing being delivered
(public/private/combination)?
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The Social Housing Regulatory Authority (SHRA) was created in terms of the Social
Housing Act 16 of 2008, and is the current Custodian of Social Housing in South
Africa. The purpose of Social Housing is to contribute to the National priority of
restructuring South African society in order to address structural, economic, social
and spatial dysfunctionalities; therefore contributing to Government’s vision of
Sustainable Human Settlements.
Social Housing contributes to widening the range of housing options available to
the poor.
 The Social Housing Investment Programme was established through this Act and
consists of different investment categories, being:



Capital Investment in respect of social housing projects; and
Institutional Investment in respect of Institutional Development and Accreditation, Project
Packaging, and Risk Management.
Funding is provided annually from National Government through two streams:
1) A direct allocation of capital funding to the SHRA from National Treasury disbursed through the NDHS;
and
2) Funds allocated to the Provincial Governments in terms of the Annual Division of Revenue Act (DoRA).
Source: SHRA
Financiers in the social housing
sector include the following:
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
The Social Housing Regulatory Authority;

Gauteng Partnership Fund (GPF);

Development Bank of South Africa (DBSA);

Commercial Banks;

International Financiers;
Source: SHRA
INSTRUMENTS FOR FINANCING
SOCIAL HOUSING:
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The funding of social housing projects requires a combination of government
subsidies, equity from SHIs and debt finance. No single initiative is solely utilised to
fund social housing development and the social housing funding model incorporates
a range of components working in synergy. The most important of these are as
follows:
 Restructuring Capital Grant (RCG): The RCG is administered by SHRA, and
stands at R125,615 per unit in 2015;
 Institutional Subsidy (IS): The IS is administered by provincial human
settlements departments. . Currently, the IS is valued at R110,000 per unit and
has been increased periodically in line with Construction Price Inflation along
with other national subsidy instruments;
 Equity from the SHI: Equity contributions are sought in respect of the Social
Housing Policy. In most cases SHIs are required to invest some equity in social
housing projects. Currently, this is limited to an average of 3% of total capital
costs in social housing projects; and
 Debt Finance: Balance of financing for social housing is provided by debt.
Currently, the bulk of debt finance is provided by Development Finance
Institutions (DFIs).
Source: SHRA
PARTNERING WITH OTHER
ORGANISATIONS
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The SHRA partners with a range of other government and
non-government organisations and entities including:
 National Association of Social Housing (NASHO)
 National Housing Finance Corporation (NHFC)
 Provincial Rental Tribunals
 Provincial Departments of Human Settlements
 Provincial Steering Committees
 Service providers
 Municipalities Funders and financial institutions
 Other Human Settlements sector entities and stakeholders
Source: SHRA
PARTNERING WITH OTHER
ORGANISATIONS
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 The Social Housing Policy emphasises the need to
maximise private sector involvement as a key principle to
guide housing policy and strategy.
 To date, the private sector has not played a primary role in
financing, delivering and managing social housing as
envisaged by the Social Housing Policy.
Source: SHRA
THANK YOU.
IHA Secretariat