With about 90% of Africa’s population unable to buy a house or even qualify for a mortgage, there is a justified need for a shift towards formal rental housing as a critical option to solve the housing crisis in Africa.
The formal rental sector deserves greater attention and expertise, as properly developed rental markets can play a formidable role in promoting affordable and decent housing in Africa, especially for thelow-income earners.
The incidence of rental demonstrates that path ways to ownership are not accessible for many,particularly newer migrants and lower income earners. In addition, rental markets can offer a wider array of housing options, including small units and units with shared facilities that maybe occupied for relatively short time periods.
Rental housing is thus an important component that cannot be ignored in finding a solution to housing in Africa.
As a true advocate of rentalhousing in Africa, SIV is eager to actively engage on and promote this segment of the housing Market, as a feasible and sustainable solution to address the continent’ housing crisis.
In Africa, the housing sector faces serious bottlenecks in terms of availability of affordable finance, scarcity of serviced land and high price-to-income ratios. Due to scarcity of affordable housing in Africa, people resort to informal settlements, informal rental accommodation propelling practices of subletting and over-crowding.
Sustainable home ownership for all is neither financially and fiscally possible, nor desirable for all household groups and life-cycle stages. Thus for the future, rental housing offers a window for housing affordability and a place in the equation of improving housing conditions for urban Africans.
Hence rental housing is very much needed for starters and households with low or irregular income, which represent more than 75% of the populations across the continent .
SIV plans to develop large-scale projects with a substantial private rented element, that will deliver real benefits for communities and for tenants, and an attractive investment proposition. Owing to its ability to leverage capital and financing and better efficiency, SIV can significantly contribute to increasing the supply of affordable housing across Africa.
The private rental sector that SIV wants to develop offers a flexible form of tenure and meets a wide range of housing needs. It contributes to greater labor market mobility and is increasingly the tenure of choice for young people, a target market left behind by the scarcity of new developments and the cost of finance.
SIV recognized the critical role that the rental housing sector in Africa could play both in meeting people’s housing needs, and in supporting economic growth. Indeed, house building is a major contributor to economic growth. Housing construction, repairs and maintenance have a direct impact on economic output - an average 3% of GDP by international standards.