South Africa’s First National Bank (FNB) announced today that its has reached its 10-year-target of financing over 100 000 affordable housing units, which represents an amount of close to R13 billion (about US$1.3 billion).
The Johannesburg-based bank said it plans to finance another 100 000 affordable homes in the next five years (by 2018), adding that it was committed to fund approximately 6 000 new housing units to the value of R2 billion (about US$200 million) over the next two years.
The South African affordable housing market has been growing thick and fast, with around 20% growth registered in the FNB portfolio over the last financial year.
With the country’s population growing uncontrollably year after year, and the ANC-led government almost running out of ideas, resources and breath to fulfill its 1994 elections promise of a ‘better life for all’ (including free houses), many families – at least those who can afford it – have been knocking on the banks’ doors to help them put a decent roof over their heads.
And this could be the reason why demand for affordable housing has been skyrocketing in this Southern African nation of 50 million people.
And families that are unable to meet the banks’ ‘sophisticated’ demands have no choice but to wait for government to ‘give’ them something. And millions have since been waiting for years.
“There is still an enormous amount to do in this market and we are confident that we will see good growth in our business and loan book in the years to come,” Marius Marais, CEO of FNB Housing Finance, said in a statement.
“There is very high demand in the affordable housing sector with an estimated million homes still needed and an average of only 20 000 units developed a year without taking into account future demand,” he added.
Photo: Affordable housing unit financed by FNB in Windmill Park in Benoni, east of Johannesburg