Top sixteen markets accounted for 35 million units in global accumulated affordable housing shortage, valued between $600-700 billion in 2012. According to Senior Housing Finance Regional Lead, sub-Saharan Africa, Financial Institutions Group, International Finance Corporation, Thierno-Habib Hann, the value represented an effective and realisable formal market.
He listed the 16 countries that formed the top markets in global accumulated affordable housing shortage to include Nigeria, Iran, Iraq, Saudi Arabia, Turkey, Russia, Mexico, Brazil, Argetina, South Africa, Egypt, Pakistan, India, Philippines, China and Vietman. Hann disclosed that the listed countries’ values of accumulated affordable housing shortage as rolled out by analysts from Mckinsey were $28 billion, $55 billion, $12 billion, $36 billion, $43 billion, $23 billion, $122 billion, $57 billion, $25 billion, $69 billion, $27 billion, $7 billion, $69 billion, $12 billion, $55 billion and $19 billion respectively.
Speaking during the African Union for Housing Finance (AUHF) conference, which ended in Abuja at the weekend on: “Housing and Housing Finance in Africa: Challenges and Opportunities,” Hann said that the value of housing shortages in each country has provided for global economic opportunity for investments.
The countries are grouped into three categories namely: High shortage and market attractiveness; other emerging market opportunity and developed market with redevelopment opportunity. Painting the pictures of chronic housing shortage in Africa, he said: “863 million urban residents live in slums, 94 per cent of people are with no access to formal housing finance products, and 96,150 housing units per day is required through 2030.”
He noted that sub-Sahara Africa has the highest construction costs of $700 per meter square (msq) of affordable housing compared to $350 per msq in India and $250 per msq in China. The IFC experts pointed out that increasing urbanisation, growth in population and growing middle class, have led to rising housing consumption in Africa, leading to congestion, pollution and rise in informal settlements in cities.
To promote affordable housing in sub-Sahara Africa, he canvassed for major reforms and investment across housing value chain, saying that these would catalyse markets to achieve goals that will lead to reduction in formal housing costs. He urged for sector interventions in regulations, planning, construction and land, suggesting the need to boost housing demand through access to finance, enhancement of access to mortgages, construction finance and microfinance.
Besides, he said there was need to: “Improve city planning, building regulations and access to land; invest in basic pro-poor infrastructure and slum upgrading; strengthen residential rental markets; strengthen local construction and building materials sectors; support private housing development and expand access to housing finance.”