Housing Backlog Addressed

February 19 - The South African Finance Minister, Pravin Gordhan called for the government and banks to work together in order to assist more people to benefit from home loans in the country.

Gordhon was addressing the issue of the housing backlog in the country and promised an extra R1 billion in order to accelerate the delivery of housing solutions to South Africans.

One of the main problems in the housing chain concerned those people who were earning too much to qualify for government assistance, but too little to be considered for commercial home loans.

"The state of the nation address correctly identified a key gap in the housing market where middle income people cannot access sufficient finance to afford homes," said Gordhan.

"Government and the banks will work together to find appropriate financing support measures so that more people can access home loans," said Gordhan.

One of the ideas is to establish a scheme where the government will share the risk with banks who make home loan financing available to South Africans who earn between R3K to R9K a month.

The issue of corruption as a cause for the backlog was also addressed, and the government admitted that poor management sometimes led to this problem.

The government also promised to set up a new fund that would channel money into the construction of water and sanitation infrastructure in rural areas around South Africa.

R1.2 billion had been set aside for this fund.

2/19/2010 10:00:26 AM