As demand continues to outstrip supply in the entry-level housing segment of the property market, pent-up demand for these kinds of homes across the country continues to rise.
This is according to Brendan Cullingworth, divisional manager of Urban Housing who says this is particularly true for the county’s emergent middle class, where the lack of stock continues to influence prices.
Cullingworth points to continued urbanisation as a major factor that is contributing to the increased backlog in housing supply. He notes that the premise of entry-level housing is to service the section of the market which doesn’t qualify for government subsidy but which also does not earn enough to qualify for a bond at the higher end of the market. “The entry-level housing market in South Africa is defined as households earning between R3 500 and R25 000, a sector which makes up just over 30% of the entire home loan market.”
Even though Gauteng seems to have the worst entry-level housing backlog, KwaZulu-Natal too required the development of gap housing or entry-level homes to cater to growing demand from its residents. It is for this reason that the Standard Bank Group have, in conjunction with KwaZulu-Natal provincial government, agreed on a series of measures to identify and develop affordable housing projects.
One such project, named Woodmead, is situated in Shakaskraal, a town in the Kwadukuza Municipality on the north coast of KwaZulu-Natal. This one-street-town is steeped in history as it was the site of King Shaka's royal military homestead called KwaHlomendlini.
Located on the R102 and situated centrally to both Stanger and Ballito, Shakaskraal can be accessed from the N2.
Set on just over 400ha, the new integrated development will comprise three main development nodes: 3 400 residential stands, 50 000sqm of retail space as well as a 150 000sqm serviced industrial area. In addition, Woodmead will house a transport hub including a taxi rank.
The first phase of 224 houses has just been launched where there are show units available for viewing. Urban Housing, as a specialist in the entry-level housing sector, has been appointed to manage the residential sector of this development.
“Phase 1 will offer entry-level buyers a selection of homes ranging in price from R340 000 to R450 000,” says Cullingworth. “The municipality has allocated in excess of R45 million to the scheme, which has been used to develop a taxi rank in the area.”
He notes that interested buyers may be able to qualify for a 100% home loan, provided the applicant is a South African citizen, is permanently and formally employed and earns a gross salary between R3 500 and R25 000 per month. “Certain first-time buyers may qualify for the Finance Linked Individual Subsidy Programme (FLISP), which is a government subsidy for any first-time buyer, provided they fulfil the criteria as mentioned above,” says Cullingworth.
Applicants will be required to fill out a pre-screening form to determine whether they will be able to qualify for one of the homes within Woodmead. “The pre-screening form requires the applicant to answer a few questions regarding their marital status, income and whether or not they are employed or self-employed. There are also a number of documents that the buyer can get ready before they apply such as a copy of their ID, marriage certificate, latest payslip and three months' bank statements. Self-employed applicants will require some additional documents such as an accountant’s letter, financial statements, registration documents and six months' business bank statements,” says Cullingworth.
Once the pre-screening form has been received with the required supporting documentation, Urban Housing will then request a credit report and check the applicant’s affordability ratios. Cullingworth says if there is no adverse information on the credit report and affordability is evident, Urban Housing will submit the information to the bank for pre-approval. He notes that the applicant will then be able to choose a home and sign a contract along with the other bank application forms necessary to submit for formal bond approval.
Urban Housing’s current portfolio comprises a range of developments across the country including areas such as Randfontein, Carnival City, Mamelodi, Port Elizabeth, Bloemfontein, Kimberly, Mafikeng and Lenasia.
For more information about the Woodmead development, contact Urban Housing on 011 463 8444 or visit the website.
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