African Union for Housing Finance Conference: A new landscape of housing finance investors 09/12/2013
Mobilising Capital for Housing Finance
CHIEF EXECUTIVE OFFICER
Bramer Bank - Sep 2013
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
Urbanisation drives demand for Housing
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
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
Huge Demand Gap of 10 to 1
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.
• 32 million households in Sub-Saharan Africa are
• 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.
• 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’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
• 33.6 million Nigerians living in urban areas (46% of
• The annual deficit is 16 million units
the urban population) are considered to be living in • 720,000 units need to be created
annually to meet the demand
• Current supply is however meeting only
3% of this demand
• 80% of the entire population is living in unplanned, • The housing deficit in urban areas is
informal settlements with poor shelter and few
estimated at 1.2 million units.
Mortgage Finance Penetration still low in
most parts of Africa
Mortgages as a percent of GDP
3% of African population have income
viable for a mortgage
According to the World Bank,
18.8% of Africa’s population earn below $20 per day.
3% of the population have
income viable for a mortgage
24% of Africa's
10.8% of Africa's population earn between $10 – $20
9.9% of Africa's population earn between $4 – $10 per
Opportunity for housing micro finance and incremental
between $2 –$4 per day
36.5% of Africa's
population earn below
US$ 2 per day
According to the UN Habitat (2010) about 40.32% of
Africa's population live in slums.
Source: AfDB (2011)
Access to Financial Services limited in
Financial service access and usage in Selected African countries
Access to Finance by Households
Source, IMF, 2011
Mauritius : a different story
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.
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
Innovations and financial deepening in different
areas of housing finance
Development & Construction finance
Finance for Rental housing
Non-collateralized credit /Micro finance
Integrated Approach for Capacity
Real Estate Equity
Credit for Housing
Microfinance – Tackling Affordability?
Data from African MFIs reporting to the MIX Market in 2011