Despite being plagued by significant challenges, not the least of which are the unfavourable economic environment and the overall lack of spend troubling the construction industry, there is reason to remain optimistic about the market, says turnkey residential developer, Calgro M3.
The key to success,says Wikus Lategan, CEO of Calgro M3, is innovation. "Very clear opportunities still exist in the market for developers, lenders and investors, particularly for homes in the affordable market, specifically costing less than R450,000 – demand remains significant and supply is very clearly limited."
Whilst alternative solutions within the industry could include the possible re-inclusion of fully subsidised housing into the secondary market as affordable housing, the delivery of integrated housing developments, inner city "residentialisation", or conversion of office blocks to residential accommodation for sale or rent, Lategan says that for Calgro M3, the focus is to look at the situation more holistically.
"Specifically, Calgro M3 would never consider participating in the resale of subsidised housing, but it is an opportunity for real wealth creation for the original beneficiaries when they are able to upgrade their homes and resell into the affordable housing market. Upward mobility of the beneficiaries is extremely important for the long-term success of social transformation and empowerment.However, one can argue that the provision of affordable housing by the private sector residential developers also forms a vital component of the social transformation and empowerment efforts of local and national governments across South Africa."
But, adds Lategan, Calgro M3 is very specific that low cost housing shouldn't be just about providing shelter. "It also has to deliver quality of life, opportunities and dignity."
Lategan believes that for the delivery of housing opportunities to be truly transformative for beneficiaries, affordable housing developments need to start offering individuals, families and communities at least some of the benefits that have previously been reserved for more affluent homeowners.
"Calgro M3 is therefore committed to helping meet the massive demand that exists in South Africa for quality housing that also focuses on superior urban design and an integrated lifestyle. Our developments aim to promote a lifestyle choice by providing security, and safe access to parks and other public amenities, including schools and churches, as well as easy access to viable public transport."
Another core aspect is sustainability. "One of the issues we're addressing is energy- and water-efficiency, focusing on reducing our carbon footprint both during and after construction by creating a healthier living environment and reducing long-term energy, water and transportation costs for owners and tenants."
He adds that Calgro M3 takes its approach to sustainable developments very seriously. "We make a concerted effort to improve water conservation by means of rainwater and/or grey water harvesting and are moving towards the provision of energy-efficient homes across the whole product offering by implementing gas, solar, heat pumps and other energy-saving devices and techniques. This includes measures for the post-construction phase to offset the water used during construction."
The group also pays attention to rehabilitating the environment i.e. planting grass and trees in all its developments as part of a greening initiative to enhance the environment, ensure long-term sustainability and to provide a better and healthier lifestyle.
While energy- and water-efficient affordable housing is still in its infancy in the country, early indications are that the inclusion of these sustainability components in the design of low-cost houses could cut the utility costs of the people living in them by as much as 20% per year. And given that electricity and water prices are set to rise significantly in the coming years, these savings represent immense value, particularly for lower- and middle-income households.
"If residents in our developments report an enhanced quality of life, better safety, access to education and employment, reduced costs and a greater sense of financial security due to property ownership and security of tenure, then we've achieved our vision. And this is of course to ‘build legacies and change lives by delivering quality products throughout selected markets within the property sector and service of the highest standards'."