New bank for the housing gap market
Bianca Capazorio | 2017-05-18 16:49:06.0
Sisulu said: “The strategic focus of the bank will be to facilitate the increased provision of finance across the human settlements value chain.” File photo
Image by: Gallo Images
Government has established a bank to provide housing loans to people in the “gap market”.
The Human Settlements Development Bank is to be launched by the department in Cape Town on Friday.
It will provide housing finance to people earning too much to qualify for RDP housing but not enough to secure mortgage bonds from retails banks.
Human settlements minister Lindiwe Sisulu announced the launch of the bank – which consolidated three development finance institutions from her department – during her budget debate.
Sisulu joked at a media conference ahead of her budget speech: “I never thought in my life I would own a bank‚ but now I do.”
But‚ the bank will only start to function once the Human Settlements Development Bank Bill‚ which is currently in its fifth draft‚ is passed by Parliament.
The department hopes that this would be done by the end of September this year.
Sisulu said: “The strategic focus of the bank will be to facilitate the increased provision of finance across the human settlements value chain.”
Once functional‚ it would also provide finance to emerging black entrants into the property sector‚ and would scale up delivery of the finance linked individual subsidy (FLISP).
This subsidy is aimed at first time home owners earning below R15‚000 per month.
But Human Settlements Director-General‚ Mbulelo Tshangana‚ said they were also considering increasing this threshold to R20‚000.
Chair of the human settlements portfolio committee Nocawe Mafu said the bank should “attempt to radically transform” the property sector‚ which remained “untransformed and dominated by cartels”.
Sisuslu said one of the bank’s priorities would be funding her department’s “catalytic projects”.
The department has prioritised 46 of these projects which would build houses as a partnership between government and the private sector.
She also announced that non-citizens would no longer be able to buy low cost homes built by the government for the poor.
Owners of low cost government-funded homes were allowed to sell them after eight years.
However Sisulu said that many of those who could afford to buy them were foreign nationals.
Sisulu said government’s intention in providing free houses was to give the poor an asset and entry into the economy. She said selling these houses “defeats the ends for which we put this together”.
And while Sisulu said it would be illegal to sell homes to non-citizens‚ they would still be able to access other government housing options such as government rental units.