A look into Housing Finance in Africa
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Investors are constantly looking to invest in new markets. Though, variation in regulation and opaque investing instruments can make investors too wary to commit to even the most enticing opportunities, such as with residential real estate across Africa. The introduction of real estate investment trusts (REITs) may change this: a vehicle that investors understand and can trust, aggregating diverse sources of funding from international and institutional investors through to households, and funnelling them into a portfolio that extends beyond the limitations of individual projects. There appear to be various types of REITs: equity REITs derive an income from rentals, mortgage REITs buy mortgages and mortgage backed securities, wihle hybrid REITs are a mix of the two.
REITs are new in Africa, as the promulgation of legislation and issuing of regulations has only happened in the past three years in Ghana, Kenya, Morocco, Nigeria, South Africa, Tanzania and Zimbabwe. Initially predominantly used for the retail and commercial real estate sectors, residential REITs are now emerging.

In Tanzania, the Capital Markets and Securities Authority (CMSA) approved the Watumishi Housing Company REIT in early 2015, It is the first fully-fledged REIT to be established in Tanzania and East Africa, with an initial funding of TZS 68 billion (US$ 31 million). The REIT is expected to grow gradually to TZS 358 billion (US$ 164.7 million) in the next five years. Together, with the development of commercial properties, the WHC-REIT aims to mobilise funding for the development of low-middle income housing (differentiating it from other developers), both for sale and for rent.  The target house price is between US$ 10 000 – US$ 40 000, with US$ 20 000 considered the sweet spot, according to Tanzania Invest.
WHC-REIT was created to help fill the gap for housing for public servants, demand for which is strong in Tanzania. The Public Service Pension Fund, Government Employees Provident Fund, PPF Pension Fund, LAPF Pension Fund, National Security Authority, National Health Insurance Fund, and the National Housing Corporation are the all stakeholders in the REIT.

A result of this is that the WHC-REIT is the main implementer of the Tanzania Public Servant Housing Scheme, and is tasked with building 50 000 housing units over five phases. The first phase, launched in December 2015, consists of 1 500 units spread across 11 regions.; the houses are to be sold under mortgage arrangements to public servants. According to Tanzania Invest, only 1.5% of public servants are provided accommodation through mortgages or any other type of housing finance. The WHC-REIT has attempted to mitigate this by entering into agreements with various banks so that workers can access mortgages at lower interest rates (11 – 13 percent, as opposed to 22 percent) for longer bond terms (up to 25 years), making the cost of accessing mortgages much lower.

WHC-REIT is a closed fund, which means that the general public cannot access units. This is planned for only three years, of which one year is left. After this, WHC-REIT units will be traded on the Dar Es Salaam Stock Exchange (DSE). The advantage of listing the REIT on the stock exchange, according to with Mr Msemwa, the CEO of WHC, is that it would allow the company to expand its capital base and allow foreign investment in the company. By trading at DSE, the general public will be able to invest in REITs by buying and selling units in the same manner they can buy and sell shares.

The WHC notes that REITs are a new concept in Tanzania that have the potential to provide a unique opportunity for the general public to create personal wealth by investing in housing, and also have the ability contribute towards overall economic development. As a mission, WHC-REIT seeks to work with other national and international fund managers and other stakeholders to develop this market in a manner that is beneficial to all parties.

As listed groups – REITs and others – explore the affordable property sector, investors can begin to develop an understanding of the opportunties in the market through their arms-length relationships with developments that their investments in the REITs facilitate.


15-17 March: 18th Microcredit Summit, U.A.E.

17 March: SA REIT Association Conference, Johannesburg, South Africa

06-07 April: East Africa Property Investment Summit, Nairobi, Kenya | AUHF members receive a 10% discount, email krusin@apisummit.co.za for more information

06-08 April: 7th Annual Affordable Housing Projects, Singapore

06-08 April: Habitat III: Thematic Meeting on Informal Settlements, Pretoria, South Africa

13-14 April: Africa Banking & Finance Conference, Accra, Ghana

05-07 May: Zambia International Property Expo, Lusaka, Zambia

09 May: Housing for Africa Conference and Expo, Johannesburg, South Africa

25-26 May: Housing Finance in Emerging Markets, 7th World Bank Global Housing Finance Conference, Washington, U.S.A.

30-31 May: East Africa GRI, Kenya | AUHF Members receive a 10% discount by entering the code AUHF!$!%EA16

06-16 June: International Housing Finance Program: Improving and Expanding Housing Finance Systems, Wharton School of Business, University of Pennsylvania, United States

17-18 June: International Housing Finance Program: Workshop on Securitization and Mortgage Bonds, Wharton School of Business, University of Pennsylvania, United States

17-22 July: Micro, SME & Housing Finance Summer Academy, Frankfurt School of Finance and Management, Frankfurt, Germany | AUHF members qualify for a €450 discount

18-19 August: Africa Property Investment Week, Johannesburg, South Africa

14-16 September: AUHF Conference & AGM, Abuja, Nigeria

02-08 October: Housing Finance Course for Sub-Saharan Africa, Graduate School of Business, University of Cape Town, South Africa, AUHF members receive a 10% discount, scholarships available

06-07 October: 3INVEST UNITE Summit, Lagos, Nigeria

17-20 October: Habitat III, Quito, Ecuador

20-21 October: GRI Africa Summit, South Africa

*Let us know of any events not listed above 
*Click here for our updated events page


The Habitat III Regional Meeting for Africa was recently held in Abuja, Nigeria. The primary output from this meeting is the Abuja Declaration, the latest Draft Common African Position on Habitat III, a six page document which suggests ways to harness the potential of the continent’s rapid urbanisation. Leaders gathered from across the continent, and discussed issues around land, housing and urbanisation.
link: http://bit.ly/1X4ZxIk


In Kenya, developers say that the continued dearth of accurate data makes working in the sector increasingly challenging. Developers can only access census data from 1999, which ‘calculated the number of households in the country based on their main source of water’, while housing data from the 2009 census has not been made available. The Kenya National Bureau of Statistics stated that ‘it only collects raw data on the number of houses in the country during censuses and does not analyse this information’, arguing that the Ministry of Housing should be responsible for collection of data relevant to housing.
link: http://bit.ly/1LKbcvz


In a recent meeting with the Atupele Muluzi, the Minister of Lands and Housing, Malawi Housing Corporation (MHC) tenants requested free housing for those that have been living in their homes for 20 years or more. Alternatively, tenants have requested government to sell those houses to them at the lowest possible price. Muluzi has promised to look into the matter, and also highlighted the great benefits the public sector reform programme will have for MHC tenants.
link: http://bit.ly/21fymvQ

The City of Johannesburg (CoJ), in South Africa, is exploring ways of formalising backyard accommodation. Many households in the city build rental units in their backyards, which provides accommodation for the lower segments of the market. CoJ is looking at alternative building methods to lower the cost of construction on these units. The first call for proposals received models that went as low as ZAR 40 000 (US$ 2 600) a unit. CoJ is still looking for cheaper solutions, as it considers this price too high.
link: http://bit.ly/1X50aBP


Swami India International, an Indian firm, is investing US$ 50 million into affordable housing projects in Ghana, Senegal and the Gambia. The company states that it has been working in Africa since 2004, when it constructed a 169-unit development in the Gambia. The company sees an opportunity for growth as Africa urbanises, though issues that it faces include the lack of skilled labour for large-scale projects, high interest on financing and limited provision of services, including road, water and electricity infrastructure.
link: http://bit.ly/1W1cAKE

In Nigeria, Dangote Cement recently announced new product lines in Okpella Edo State and Itori Ogun State worth nine million metric tonnes. Simultaneously,in an attempt to make the price of cement more affordable to various segments of the market and to assist block moulders in developing better quality building blocks, Dangote has slashed cement prices by N 500 (US$ 2.5)—from N 1800 to N 1300 (US$ 9 - US$ 6.5).
link: http://bit.ly/1npOOvS

Also in Nigeria, Ogun State Property and Investment Corporation (OPIC) and Lafarge Africa Plc opened New Makun City. OPIC contracted Lafarge to build the first ten units of the development, using aluminium shuttering technology and cement, which allows for units to be constructed in just a few days. The units are 78 square metres each and have three bedrooms.
link: http://bit.ly/21fySK9


A new microfinance bill is being discussed that has the support of the Bank of Tanzania. It is hoped that the bill will increase financial inclusion in rural areas, while offering better regulation of the microfinance sector. Access to any type of financial product in Tanzania is very low, at between 17 percent and 22 percent.
link: http://bit.ly/1YjB7MH
The Botswana Housing Corporation (BHC) is looking to revive its Tenant Purchase Scheme (TPS), which it suspended in 2004. The scheme will allow tenants to purchase home directly from BHC, without securing a mortgage from a bank, through instalment payments for periods of up to 25 years. 
link: http://bit.ly/1R1DRyt

Housing Finance Group announced a 23 percent increase in after tax profit to KSh 1.2 billion (US$ 11.8 million dollars) for 2015. HF Development and Investment (HFDI), its subsidiary, sold 500 completed units during the year, while its mortgage subsidiary also posted robust growth—loans and advances to customers from the Group increased to Ksh 53 billion (US$ 522 million). HDFI has just launched the construction of Komarock Heights Phase 1, which comprises 480 residential units.
link: http://bit.ly/1npPhOO

The Deputy Minister for Lands, Housing and Human Settlements Development in Tanzania announced that National Housing Corporation will be responsible for constructing two new cities in the north of the country. The proposed Safari City will be built on six million square metres of land in Matevesi, while Usa-River Satellite City will be built along the Moshi-Arusha motorway. The Ministry is trying to make sales of houses from these developments exempt from value added tax.
link: http://bit.ly/1OWTNuh

In its new strategy, Shelter Afrique aims to raise between Sh74.32 billion (US$730 million) KSh 305.42 billion (US$1 billion) in additional capital. The company aims to build over 45 000 affordable houses and provide at least 30 000 mortgages, together which should create over 30 000 jobs, by investing in over 100 projects. Part of the new stragey involves the creation of a subsidiary that will invest equity in developers of affordable housing. Shelter Afrique also plans to open offices in Côte d’Ivoire and Zambia by the end of this year.
link: http://bit.ly/1QAi6nm

The African Development Bank (AfDB) has made an US$ 8.2 million equity investment in Shelter Afrique. This investment is part of an ongoing capital drive by Shelter Afrique from its shareholders, who comprise of 44 African countries, the AfDB and Africa Renaissance Corporation. This investment will boost Shelter Afrique’s capital base as it continues to model itself as a pan-African DFI with the capacity to respond to the growing demand for affordable housing and related infrastructure services throughout the continent. 
link: http://bit.ly/1QvCFjz

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African Union for Housing Finance
PO Box 61674
Marshalltown, Gauteng 2107
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