How Affordable is ‘Affordable Housing’ in Sub-Saharan Africa?

A scrutiny conducted by JLL in five countries in Sub-Saharan Africa has revealed an annual shortage of housing in excess of 24.25 million in those countries alone, signalling far greater problems in the region. The countries examined include South Africa, Nigeria, Kenya and Ghana. With the increase in urbanization and population, many countries have had growing concerns over the plight of affordable housing. The analysis of those markets showed that the governments have been overwhelmed in their efforts to provide affordable housing to citizens.

In South Africa, affordable housing subsidies account for only 30 per cent of the total residential property development in the country while in Kenya, the government programme is producing just 50,000 units annually although some developers are coming up with more innovative ways to deal with the situation. For instance, Urbanis Africa’s noteworthy approach which involves the sale of plots of land to low-income households, where they are then able to engage with the buyers in a construction programme.

The situation in Nigeria which has such a vast population is no better with CAHF estimating that the annual output in that market is only about 100,000 units. Ghana too relies mostly on local contractors with a total of 40,000 units brought into the market. In Tanzania, the Tanzania Public Housing Scheme is poised to deliver merely 50,000 by 2020.

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According to the research, the average affordable housing price in the major cities was about $21,000 Johannesburg and Nairobi, $11,000 in Abuja, $34,000 in Accra and $15,000 in Dar-es-Salaam. The analysis also sought to assess the purchasing power of households with respect to the ability to pay for a mortgage in line with the defined price of affordable housing in those cities. This was determined by the capacity of a household to repay a mortgage using household income, the base rate being 30 % of a household’s monthly income.

The finding was that an estimated 60% of households within Johannesburg are unable to afford an affordable housing unit within the city, 51% in Nairobi, while for Abuja only 12%. Accra, Ghana and Dar-es-Salaam had the highest number of households unable to afford housing units at 75% and 85% respectively. In essence, only 25% of households in Accra and 15% of households in Dar-es-Salaam.

As to whether the units currently being supplied to these markets deserve the tag ‘affordable housing’, the analysis found otherwise. Although the supply side of housing in Sub-Saharan Africa is meant to be affordable, the numbers suggest that more than half of the population cannot afford the houses. Despite all the cities having populations of more than 2 million people, more than 60% of them cannot afford ‘affordable housing’ by their own local standards.

Also Read;Buying and Renting In East Africa

SOURCEJLL
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