Title
Housing Finance in Africa: A review of Africa’s housing finance markets - Yearbook 2019
Tags
Centre for Affordable Housing Finance in Africa
Description
Investor interest in affordable housing has grown considerably in the past ten years. A rapidly urbanizing, young and growing middle class, has suggested an important investment opportunity at the same time as opportunities in other sectors have declined.
While conventional investors shifted to residential property in general, investors looking for impact opportunities took this further towards affordable housing. More recently, conventional investors are also looking into the ‘affordable space’.
The argument for affordable housing has long been a social one, framed in the context of key global agreements such as the Sustainable Development Goals (SDGs). More recently, it is also becoming an economic one, and increasingly, the public sector housing conversation is happening within central banks and finance ministries, as well as within the housing, planning and land ministries. While these arguments are compelling, they provide an insufficient driver for conventional investors that have shareholders to report to and quarterly financials to publish.
The next frontier for the growth of affordable housing in Africa, therefore, is to build the investment argument – because this argument will ultimately shape the potential for affordable housing at the scale required. Over the past ten years, we’ve seen an
improvement in many of the metrics framing national and local housing sectors. We have also seen the careful but progressive effort by the private sector to identify niche market opportunities along the value chain. This effort must be closely monitored and shared, because the investment argument is found here. With information, each successful investment begets further investment, crowding in market players seeking new opportunities. Without information, each failed investment builds a stereotype that militates against further investment, and shifts investors’ sights elsewhere.
In 2019, investors are desperate for information about the affordable housing market, its opportunities and its risks. Their enthusiasm will dissipate if specific opportunities cannot be identified and quantified in sufficiently reliable ways. Current investment in affordable housing in Africa, while growing, is still grossly insufficient. Taking it to the next level will require a concerted effort to demonstrate what is possible to the investors who have real capital to place. The next ten years must be focused on this goal.
