The on-site office is now open daily and on weekends to view show houses. Buyers are requested to bring the following documents, to secure their property (legible copies of the following...) Identity Document, Marriage Certificate, 3 month's bank statements and latest payslip. NO DEPOSIT REQUIRED

Article in Housing in Southern Africa by Carol Dalglish

R1,6-bn GAP housing

FNB's CEO of Housing Finance, Marius Marais, is enthusiastic about the bank's plans for 2010 and beyond. Housing in Southern Africa visited the FNB-backed Golden Gardens Village development.

The new R1,6 billion housing development will provide between 5 000 to 6 500 units for the GAP market and the village development will roll out over a period of ten years. With bond approval for the first 200 units, 91 units are already occupied. Two thirds of applications are proving successful. Of the one third that failed to secure a mortgage, of those, two thirds qualify for a smaller bond, and the balance were unable to secure a bond because of the application of the National Credit Act.

The well-built houses range in size from  from R237 000 for a 40m2 unit to R450 000 for a 75m2 house with 3 bedrooms, 2 bathrooms and a garage. The heavy wooden doors, Marley roof tiles and fitted blinds, designed bathrooms and tiled floors add to the quality finish of the interior of the units.

Golden Gardens Village is aimed at families earning between R8 000 and R10 000 per month, which takes into account the combined income of the two primary earners. Planning has allowed for clinics, schools, crèches and a community centre on the 316ha site. FNB inherited Saambou’s business base, a R6-billion property book and 200 staff.

In 2000, FNB saw an opportunity to focus on the affordable sector providing finance for those who earned up to R15 000. But developers struggle to achieve a unit price below R200 000 and the government’s baseline is still an issue.

The Cosmo City launch and roll out provided FNB with a huge amount of material and “We learnt that larger developments take much longer to roll out – we are more realistic now. The growth in the affordable market has been phenomenal and much better than in the high end sector. This economic cycle was a very good test and it proved GAP housing is a sustainable business with enormous potential,” says Marais.

Based on demand for housing there is a shortfall of 600 000 dwellings per year. Not all of them will qualify for a mortgage because of the National Credit Act. “But whether it is outright ownership, deed of transfer, or a rental agreement with the option to buy, there needs to be realistic funding and or rental models in place to provide the affordable market the much needed access to housing finance. With our positioning in the market we are continuously improving and offering new products.”

Marais is thrilled about government’s R1 billion-injection into housing to provide new funding models in the banking sector. The release of 6 000 ha of government land for residential development is the starting point and this needs to be offered to developers at an affordable reasonable share price for the GAP market’s R3 500 – R8000 income earner. “This needs to be linked so that the low land cost flows through to the consumer. Secondly, my view is that the funding needs to be linked to a risk fund. The government has allocated R1bn to the banks to play with the funds and multiply them, so that gearing R1bn creates R10 bn.”

“In Cosmo City, FNB used the finance-linked subsidy to enhance affordability, the original product allowed for a small increase each year. This provided the buyer with an extra 10 to 15% more purchasing power. Those who had a fixed bond of 10.5% for five years in the Step-Up product will continue to benefit. "We will come to the market soon with an improved ‘Step-up’. With the daily rate changes, a mortgage is one of the biggest monthly commitments. We are looking at creating more stability in the monthly bond instalment. We don’t want to offer longer term loans of 30 years. By doing this you are effectively paying back the original purchase price of your home over the extra 10 years of repayment."

Earn cash!

What is the Buddy System?

You earn R500 cash for each approved Golden Garden home owner you refer to us

HOW?

Refer your family & friends directly to your agent and make sure they tell the agent YOU told them about

Golden Gardens!

As soon as their bond is finalised, we pay you cash!