Affordable housing has grown legs across the African continent, with the subject coming up for a panel discussion at the IHS Affordable Housing conference held on 5 September. This is the first part of a two-part series.
The panel consisted of: Gerhard Zeelie, Divisional Executive Property Finance Africa at Nedbank Corporate and Investment Banking, focused on Rest of Africa; Archie Graham, CEO: Jimmey Construction (Windhoek, Namibia); Sam Kariuki, Group Financial Director of Centrum Investment Company (Nairobi, Kenya); and Rushil Bhaat of private equity firm Actis Africa, based in London with an emerging market focus.
Graham said, “There has been quite a focus in Namibia over the last two to three years to develop the affordable housing market, with companies such as HIS coming in and kick-starting a few developments in Windhoek and along the coast. It is fast gaining traction, and the biggest change we’ve seen is the introduction by the Bank of Namibia three years ago specifically for the residential sector of a reduced deposit system for investors (from 50% to 20%). This has shifted the market quite drastically to a focus from investors to first-time homeowners. We are now seeing first-time homeowners getting into the market in the affordable housing space, and the property development sector has set its eyes on that market.
“Although many people think affordable housing is the same across the continent, one of the idiosyncrasies of Namibia is the vast spaces in the country which has impacted the culture in that people want spacious rather than dense city centre homes (which is the case in Kenya). The dream of every Namibian is to have a 300m2 erven with a stand-alone home, and the servicing of that site immediately makes a development unaffordable. This requires an education process to change mind sets if homes are to be truly affordable, by getting people into smaller high-rise apartments.”
Kariuki said, “The position in Kenya is similar to that of Namibia. In Kenya, the government has implemented a programme to upgrade infrastructure and a refocus from Nairobi to the counties, and this in turn has opened up opportunities in affordable housing. Up until four years ago the focus was on the higher end of the market, which has become saturated.”