Affordable Housing Market a Key Component in 2016

Affordable Housing Market a Key Component in 2016

Further developments in South Africa's affordable housing market and investments in social infrastructure are key to positive prospects for 2016.

Meyer says South Africa is experiencing growth in the construction of homes priced between R500 000 and R2 million, targeting the emerging middle class.
This is according to Corobrik MD, Dirk Meyer, who says they will look to add to the value of South Africa’s infrastructure stock and consumer investment at the housing entry level, where there is minimal disposable income for maintenance.

Meyer says South Africa is experiencing growth in the construction of homes priced between R500 000 and R2 million, targeting the emerging middle class.

"This is the townhouse market that virtually disappeared in 2008, and which is now making a comeback. It offers significant growth opportunities, as outside that arena there has been only a slow, gradual increase in the number of plans passed,” says Meyer.

Houses priced between R100 000 and R350 000, falling within the government subsidised housing segment, cater to a different market, but also one in which Government has been falling behind its targets, says Meyer.

However, he says recent government initiatives have been aimed at boosting delivery.

Meyer says the Gauteng and Eastern Cape governments had been building schools, and indications were that KwaZulu-Natal was coming to the fore with its school infrastructure development initiatives.

"The municipal elections will provide impetus as municipalities experience some urgency to deliver before their voters head for the polls. One example is the cycle tracks being installed in Soweto and Tembisa,” says Meyer.

However, in 2015 load shedding posed significant challenges, and he says this might present a constraint on future growth.

“Without power, buildings could not be constructed and, while there were building projects aiming to come off the national grid, this was still a specialised niche,” says Meyer.

"The current stability of the power supply has been a positive factor."

While growth for manufacturing and building supply companies within South Africa will have to be fought for, Meyer says he believes there are a variety of opportunities into the Southern African Development Community (SADC) countries, some of which Corobrik will be pursuing.

Property24

16th Jan 2016