First National Bank (FNB) on Wednesday announced a joint commercial-property and housing-finance deal that will see the provision of over 3 000 houses in Protea Glen, Soweto, over the next two years.
The suburb of Protea Glen to be developed will be called Glen Ridge.
The first batch of houses is expected to be available for occupation in September/October this year.
According to a memorandum of understanding between the minister of housing, the four major South African banks and the Banking Association of South Africa, the banks will strive to deliver a minimum of R42-billion for new affordable housing in the R1 500 to R7 500 income-per-month households by 31 December 2008, according to the financial sector charter.
This FNB initiative will see a collaboration whereby FNB commercial property finance will provide approximately R300-million developer finance and FNB housing finance will provide in excess of R500-million for end-user finance. This deal therefore provides an ideal opportunity to not only achieve the financial sector charter targets but to also help create functioning housing markets in previously under-served areas and make home-loan finance available and accessible to the targeted market.
Research from the FNB residential property barometer released on Wednesday illustrates that there is a massive shortage of property in townships nationally. In Gauteng, there are approximately seven buyers to every property (old stock and new developments).
FNB housing finance CEO Marius Marais says the bank is committed to meeting the targets set out by the financial sector charter and helping close the gap in this market.
“Through our partnerships with national, provincial and local government, as well as our innovative financing of the project, FNB will not only provide houses for more than 3 000 families, but will help facilitate further infrastructure such as schools and clinics that will serve the community of Glen Ridge.”
Each unit is a three bedroom, one bathroom house and will cost R168 000 (all inclusive). FNB’s Smart Bond end-user financing product has been specifically designed to meet the needs of individuals earning between R2 000 and R7 500 per month.
In addition, prospective homeowners will be able to apply for government subsidies to further help finance the house.
“FNB embraces government’s housing subsidy as equity to ensure affordability and quality houses for this market,” says Marais.
FNB’s commitment to provide housing finance and meet the targets set out by the financial sector charter will extend beyond the Glen Ridge housing development and further project announcements will be made during 2006. — I-Net Bridge