African Union for Housing Finance Conference: A new landscape of housing finance investors...
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Transcript of African Union for Housing Finance Conference: A new landscape of housing finance investors...
ASHRAF ESMAELCHIEF EXECUTIVE OFFICER
Bramer Bank - Sep 2013
Mobilising Capital for Housing Finance
Landscape of Housing Finance in Africa
Urbanisation of African economies
Africa’s Middle class needs housing
Opportunities in Property Markets
Affordability – a Key Challenge
Lack of long term finance
Housing supply constrained
Rising costs of building materials
Integrated Approach
Housing Microfinance
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Fast urbanization of Africa3
4
Africa is almost as urbanized as China and has as many cities of 1 million people as Europe.
As a result 60% of Africa’s urban population lives in inadequate housing.
• 46 African cities are now larger than one million people
• 2% lived in Cities in 1900 2.0millpp
• 35% lived in cities in 2007 0.4bill pp
• 65% will live in cities in 2050 1.4bill pp
• Every day for the coming fifteen years, Africa’s cities will
have to accommodate an extra 40,000 people
• => 20 million new urban households 2007 - 2050
Urbanisation drives demand for Housing
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Africa is plagued with a chronic inability to meet the widening gap between housing demand and supply for low income groups. The gap is approaching 10 to 1.
Huge Demand Gap of 10 to 1
Region Demand Supply
Sub- Saharan
Africa
• 32 million households in Sub-Saharan Africa are
considered inadequate.
• Under current urbanisation rates , an additional 14
million housing units per annum are required
• 308 million people; 191 million of which
live in inadequate housing.
Kenya • 60% of households are considered ‘inadequate’
housing and are located in slums.
• 150,000 units are required per year
• Less than 30 000 units per year
• The annual deficit is thus more than
120,000 housing units per year
Ghana • Ghana’s annual demand for housing currently
stands at 120,000 housing units per annum
• Current housing supply provides 42,000
units per annum which is only 35% of the
demand
Nigeria • 33.6 million Nigerians living in urban areas (46% of
the urban population) are considered to be living in
inadequate housing
• The annual deficit is 16 million units
• 720,000 units need to be created
annually to meet the demand
• Current supply is however meeting only
3% of this demand
Tanzania • 80% of the entire population is living in unplanned,
informal settlements with poor shelter and few
basic services
• The housing deficit in urban areas is
estimated at 1.2 million units.
Mortgage Finance Penetration still low in
most parts of Africa
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20
18
16
14
12
10
8
6
4
2
0
Mortgages as a percent of GDP
0.070.07 0.16 0.21 0.39 0.50.5 0.51 1.1 1.2 1.3 1.6
2.3 2.32.51
3.94
12 12.2
16.9
19.6
26.4
3% of African population have income
viable for a mortgage
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18.8% of Africa’s population earn below $20 per day.
10.8% of Africa's population earn between $10 – $20
per day.
9.9% of Africa's population earn between $4 – $10 per
day.
Opportunity for housing micro finance and incremental
housing delivery.
According to the UN Habitat (2010) about 40.32% of
Africa's population live in slums.
Source: AfDB (2011)
According to the World Bank,
3% of the population have
income viable for a mortgage
36.5% of Africa's
population earn below
US$ 2 per day
% of Africa's24
population earn
between $2 –$4 per day
$2,00/day<
Access to Financial Services limited in
Africa
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Access to Finance by Households
Financial service access and usage in Selected African countries
Source, IMF, 2011
Mauritius : a different story9
MAURITIUS
<$2,00/day
In 2012, the price of a newly built house is between US$39 750
and US$49 650.
88.9% of Mauritians own their home.
A small percent of the population cannot access MHC and NDHC
loans, event hough they are employed.
The minimum loan for a mortgage was lowered to US$451.46
making access to finance for almost all Mauritians.
4.8 percent of the population live in iron/tin walled houses.
International poverty line; less than 2 percent of the country's
population live below US$60 per month.
10 Informal Sector is 80% of home buyers
Affordable housing is a $30 billion market in Africa. The size of the market commands a huge potential for innovative housing finance players.
Innovations and financial deepening in differentareas of housing finance• Development & Construction finance• Finance for Rental housing• Mortgage finance• Non-collateralized credit /Micro finance
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Real Estate Equity Partnerships
Construction Financing
Rental Housing
Finance
Mortgage Finance
Non Collateralised
Credit for Housing
Integrated Approach for Capacity
Enhancement
Microfinance – Tackling Affordability?12Data from African MFIs reporting to the MIX Market in 2011
Thank You
13
Bramer Bank – Sep 2013