THE International Finance Corporation (IFC), the largest global development institution, said on Tuesday it had invested more than $63m in a housing solutions fund for the support and development of affordable housing in South Africa and sub-Saharan Africa.
The International Housing Solutions (IHS) Fund II aims to address the need for housing across the continent and the lack of affordable housing.
The first IHS fund has already committed more than R2bn to providing affordable housing in emerging markets.
Speaking at a press conference in Houghton, Johannesburg, on Tuesday, Saleem Karimjee, IFC senior manager for Southern Africa, said services such as access to quality housing were a priority in Africa.
"IHS Fund II offers an attractive opportunity for private investors to gain access to a fast-growing market with significant positive social impact," he said. "The IFC’s commitment will stimulate investment, growth and job creation in sub-Saharan Africa, demonstrating our support that can help catalyse additional fundraising."
The National Housing Finance Corporation is working with the IFC, and CEO Samson Moraba said the corporation was delighted with the investment as it would accelerate the delivery of housing. Its mandate is to broaden access to affordable housing finance for low- to middle-income South African households.
"It will also contribute toward foreign direct and private sector investment as well as job creation," Mr Moraba said. "We firmly believe that our deliberate strategic partnership with IHS will unlock the delivery of housing at scale, and ultimately lead to the creation of sustainable and attractive communities where people can live, play and pray."
The "missing middle" in residential housing is those who earn to much to benefit from the government’s Reconstruction and Development Programme housing but cannot afford to enter the traditional housing market, which is out of reach for most South Africans.
Planning Minister Trevor Manuel, in an address at IHS’s annual affordable housing conference last year, estimated that only 15% of South Africa’s housing was efficient. The government reports that in the gap market, there is a backlog of 600,000 units that grows every year by about 100,000 units.
IHS managing partner Soula Proxenos said there were prospects for investors in emerging mortgage markets.
"There are many great opportunities for affordable housing investments across Africa, and we’re optimistic that Fund II will deliver excellent returns for investors, as our first fund is showing," he said.
