Growing housing opportunities in Africa: Encouraging investment / Growing the Market

A joint conference offered by the African Union for Housing Finance 

and the Bank of Tanzania’s Housing Finance Programme

 8 – 10 October 2012

Bank of Tanzania Conference Centre, 10 Mirambo Street, Dar es Salaam, Tanzania
Africa’s rapidly developing economies and cities offer tremendous opportunities, and challenges, for housing development and investment.  Urbanisation rates in Africa are the highest in the world, and positive growth over the last decade has put many countries in a position to assertively address the housing situations of their populations. While the mortgage sector remains small, developments in many countries suggests that this is changing.  Housing practitioners across the continent are beginning to grapple with and understand the opportunities available and are developing precisely targeted products and projects.  Their work begins to chart pathways for new entrants into the sector, and this will contribute towards the growth of the housing sector across the continent.  Governments, too, are recognising the integral role of housing in overall economic growth, and are addressing the regulatory and policy constraints to housing investment, opening up further opportunities for growth.
To showcase and promote these opportunities, the African Union for Housing Finance and the Housing Finance Programme of the Bank of Tanzania have joined forces to offer a conference with the theme “Growing Housing Opportunities in Africa: Encouraging Investment and Growing the Market”. 

It is fortuitous to offer the conference in Dar es Salaam, Tanzania, where the Ministry of Lands, Housing and Human Settlements Development and the Bank of Tanzania are working together in a partnership with the World Bank, and with the private sector, to grow housing opportunities in a focused way.   Tanzania’s experiences in growing its mortgage market and promoting the delivery of affordable housing, while also actively addressing the market where mortgages cannot go, will be showcased.  The experiences in Tanzania will be of particular interest to other countries exploring the potential of a mortgage liquidity facility, or who have already ventured on this path and wish to consider alternative approaches to the concept.  The first day will focus on ways to encourage investor interest, through the development of sustainable investment models, the collection of data and the development of lender track records.

The focus of the second day is on growing the market through the development of niche market interventions and products that meet the breadth of the housing need. The day starts with a showcase of successful developments in progress – delegates will be invited to choose four, of up to ten projects, which will be presented simultaneously in a “housing developments marketplace”.  This is followed by a session exploring different ways in which the needs of the low-income population can be served – from the provision of micro-mortgages through to sustainable housing microfinance.  The different examples offer housing practitioners useful insight into opportunities for their own growth and development.

This conference will enable delegates to define their own role in growing housing opportunities in Africa.  Whether delegates are government officials, investors, developers, lenders or members of civil society, the conference will offer each participant useful insights and evidence for promoting housing in their own local contexts.

Hong Kong plans to ramp up new flats to 50,000 a year

HONG KONG - Space-starved Hong Kongers could see a steep ramp-up in the number of new flats built - to the tune of 50,000 a year, if a key aide to new leader Leung Chun Ying has his way.

If realised, it will be the highest number seen in Hong Kong over the past two decades, and will certainly bring to a screeching halt the spike in property prices, which have soared 80 per cent in the last three years alone.

It marks a huge jump from the 18,000 flats that were built in the last fiscal year ending March, and outstrips the 35,000 goal set by the previous Donald Tsang government for the coming years.

In an interview with The Straits Times, Mr Barry Cheung, who chaired Mr Leung's election campaign and is now a member of his executive council, said: 'I think we have to provide significantly more flats than what we did in the last five years.

'We need to get it up to at least 50,000 a year.'

Mr Leung has made housing a key platform of his government and has pledged to release more land. But he has not said how many homes they will provide for.

Mr Cheung's view - he is also the chairman of Hong Kong's Urban Renewal Authority - provides a hint of the parameters that the new administration is considering.

But flooding the market with 50,000 units a year invokes fears of plummeting property prices.

In 1997, Hong Kong's first chief executive Tung Chee Hwa promised to build 85,000 flats annually - reportedly Mr Leung's idea. But the policy collapsed when market sentiment went south and Hong Kong was hit by the Asian financial crisis.

Mr Cheung says that what is needed this time is for the government to step in with more public housing to buffer private home owners from the impact.

Private homes comprise over half - 52 per cent - of the market in Hong Kong. About 30 per cent live in public rental flats, while the remaining 18 per cent live in flats the government sells at discounted prices.

Of his proposed pipeline of new homes, less than half - about 20,000 - would be private homes. The rest would be public housing.

At the bottom, more rental flats would be built - some 176,000 applicants are now on the waiting list. The government will build 15,000 such flats a year.

The second tier is the subsidised homes under the Home Ownership Scheme (HOS) for low-income families earning below HK$30,000 (S$5,000) a month. There is a planning target of 5,000 a year.

Mr Cheung says that a third tier needs to be created, for what he calls 'the typical middle class' - those who earn too much to qualify for HOS but cannot afford private homes. This way, needs can be met 'without necessarily bringing down the private market'.

It will take three or four years to realise this plan of building more flats, but genuine buyers will be able to enter the market before then, he adds.

'If investors see that down the road, there will be increased supply, they will be less inclined to speculate and that takes demand out of the market today. So more end-users would be able to go in,' he notes.

Such a proposal would benefit the many Hong Kongers - about 100,000 live in homes such as garrets and bed-space flats - on the hunt for affordable homes.

But it raises the ire of developers like Mr Steward Leung, chairman of the Real Estate Developers Association executive committee, who calls it 'irresponsible'.

'If all 30,000 are for public rental housing, we developers of course welcome that. But if they are for HOS flats, then the market will be shaken, definitely.'

Dr Edward Yiu of the Hong Kong University worries about a possible unintended impact of having the public sector expanding its role - a 'polarised housing market'. He says: 'Developers would want to maximise their profits with the less land given, and so will turn them all into luxury flats.'

source: http://www.stproperty.sg/articles-property/foreign-property-news/hk-plans-to-ramp-up-new-flats-to-50000-a-year/a/73057

CEMEX: mexican case study

MUCH MORE THAN A HOME

Malaysian - My First Home Scheme

Skim Rumah Pertamaku (SRP) - My First Home Scheme was first announced in the 2011 Budget by the Malaysian Government to assist young adults who have just joined the workforce, earning RM3,000 per month or less to own  their first home.

The Scheme allows young adults to obtain 100% financing from financial institutions, enabling them to own their 1^st home without the need to pay a 10% downpayment. This is in line with the Government’s aspirations of increasing home ownership amongst the “rakyat”.

In the 2012 Budget, it was announced that the maximum property value be increased from RM220,000 to RM400,000, effective from 1 January 2012.

Source: http://www.srp.com.my/docs/html/home.html

Affordable Housing: Middle East

Affordable housing has shot up the Gulf’s policy agenda in the slipstream of the Arab Spring. Over the past year, governments across the region have woken up to the fact that putting roofs over people’s heads is central to the viability of the social compact between state and subject......

...... http://www.thegulfonline.com/Articles.aspx?ArtID=4342

California's Community Redevelopment Agency

California’s community redevelopment agencies were created in the 1940s to encourage urban renewal. The agencies could acquire property, including through condemnation, finance infrastructure improvements and sell the land to private owners at below-market prices. Their dissolution has thrown into question the fate of hundreds of projects, including housing developments intended for low- and moderate-income people.

In California, it is relatively rare for developers to be offered tax abatements, density bonuses and other incentives for building in places that are considered risky. Instead, the redevelopment agencies could use the additional property taxes that were generated by enhancing the value of the land, and this so-called tax increment financing became the primary redevelopment tool. This year the incremental tax would have amounted to $5 billion, or 12 percent of all of the property tax collected throughout the state.

............ http://www.nytimes.com/2012/04/11/realestate/commercial/an-uncertain-fate-for-urban-projects-in-california.html?adxnnl=1&ref=realestate&adxnnlx=1334397364-XOV1j+dMvMrkEwBM9V51Yg

50 Storey Public Housing in Singapore