Housing in Southern Africa June 2016

Settlements

Infrastructure

in Southern Africa

NHBRC

SPECIAL REPORT

village of hope

www.crown.co.za

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H O U S I N G in Southern Africa CONTENTS

NEWS

9

2 4 6 5 7 8 9 8

Ed’s Notes Cornubia Skills Training Masiphumelele BNG project Manenberg Housing Project Sectionals in Hout Bay Belhar Social Housing Imizamo Yethu Housing Project Ceiling Retrofit Project

HOUSING

10 11 12 16 14

Growth in House Prices Stable Growth inHousehold Credit andMortgage Balances Midvaal Attracts Investment Major Metro Property Barometer Village of Hope

14

NHBRC SPECIAL REPORT Youth Brigade Programme Savanna City, Youth on Site

Govan Mbeki Best Youth Contractor TVET Colleges and Budding Youth Entrepreneurs Kanana ENERGY EFFICIENCY, GREEN BUILDING & IBTs Power Producers to Contribute 7 000 MW

17

21

BRICKS & PAVING

22

R700 million Marikana Housing Project

BATHROOMS, KITCHENS & PLUMBING Ergonomically Designed Concealed Cistern

25

INDUSTRY BUZZ Start-Ups 29

22

32

Enterprise Programme

June 2016

H O U S I N G in Southern Africa

ED’S NOTES

Opportunities for youth contractors

THE TEAM

In the past few months we have seen the National Home Builders Registration Council draw accolades for its Youth Brigade training programme that creates opportunities for budding youth entrepreneurs, developers and contractors.

EDITOR Carol Dalglish housing@crown.co.za ADVERTISING Brenda Grossmann brendag@crown.co.za DESIGN Karen Smith PUBLISHER Karen Grant DEPUTY PUBLISHER Wilhelm du Plessis Colin Mazibuko CIRCULATION

I t is a symbiotic collaboration be- tween the Department of Human Settlements, NHBRC, provincial and local government, to pioneer transformation in the housing sector. It is really inspiring visiting sites around the country and interviewing a number of Youth Brigade partici- pants. The Govan Mbeki Best Youth Contractor, Thokozane Littler, owns and runs Madimong Trading & Ser- vices and this modest youngman is a trulyworthywinner of the prestigious award. As a housing contractor, he is happiest handing over well built houses to government beneficiaries and takes great pride in his workman- ship and pleasure in the appreciative words of new home owners. His business model weaves social and economic responsibility into the very fabric of Madimong Trading & Services. He offers young people like himself the opportunity to have a good introduction to working in the built environment and has branched out in training and construction. NHBRC’s youth champion, Zweli Magano, has a wealth of building industry knowledge and oversees the Youth Brigade training programme. The Minister of Human Settlements, Lindiwe Sisulu, aims to ensure that 10 000 youth receive training by 2019 and all stakeholders are keen to assist the Minister to deliver on 4,5 million housing opportunities. Putting the youth to work, giving them a stake in the built environment and providing them with a stipend during training bodes well for the sector. Kudos to the Department for this creative, workable initiative. Going green using recycled materials is another area of the hu- man settlements built environment that has peaked interest in the North West Province. The Village of Hope, a R285 million residential project on 285 ha overlooking Hartebeespoort Dam, has been constructed using recycled polystyrene materials. The patented product uses 720 kg of

recycled polystyrene to build a 68m²house.Thevillagewillaccommo- date 1 000 orphans on completion. A 32 m² house costs R28 000 to build. This is a workable, cost effective housing solution that government aims to replicate on other projects. The City of Cape Town has retrofit- ted 3 600 government fully subsidised houses with ceilings and will com- plete a further 4 500 by the end of August. Considering the chilly Cape weather, the insulation and weath- erproofing will be most welcome by beneficiaries. Every year, hundreds of thousands of South Africans take a leap of faith and start their own businesses and we offer some start-up guidelines on where to get help. Darlene Menzies from SMEasy shares some of her expertise. On that happy note, we hope that you enjoy the read!

PUBLISHED MONTHLY BY: Crown Publications cc Crown House Corner Theunis and Sovereign Streets, Bedford Gardens 2007 P.O. Box 140

Bedfordview 2008 Tel: (011) 622 4770 Fax: (011) 615 6108

email: housing@crown.co.za www.housinginsamagazine.co.za

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All rights reserved. No part of this material may be reproduced, stored in a retrieval system or transmitted in any formor by anymeans, without prior permission from the publisher. Disclaimer: Crown Publications can- not be held responsible for any errors or omissions whatsoever.

Carol Dalglish • Editor

AVERAGE CIRCULATION (FIRST QUARTER 2016) 3 727

Govan Mbeki Awards 2014 - Best Media - Housing in Southern Africa

June 2016

News

Cornubia skills training

I t is a joint venture initiative be- tween National, Provincial De- partment of Human Settlements, eThekwini Municipality and Tongaat Hulett Development. The multi- billion rand project set on 1 300 ha is set to be eThekwini Municipality and the Province’s largest sustainable in- tegrated human settlement initiative. The mixed-use, mixed-income development incorporates industrial, commercial and residential space and will be developed over 25 years, to become a truly integrated human settlement. Several government departments with Tongaat Hulett Developments, are upskilling residents of Blackburn informal settlement in a bid to pro- vide job opportunities at the nearby multi billion rand Cornubia estate. The training course consists of one month of theoretical and practical training followed by two months of work experience. Blackburn informal settlement residents are learning the skills they need to find jobs as bricklayers. Government has sponsored the training programme while Tongaat Hulett Developments provides the platform for work opportunities. Training began with a job readi- ness programme earlier this year. After learning the theory, the local community members put their skills into practice, laying brick walls up to roof height and making provision for windows and doors. Training was provided by Elangeni TVET College at Tongaat Hulett De- velopments, Blackburn Estates SSIP (Socioeconomic Sustainability and Innovation Programme) Hub, located at the old Blackburn Primary School. After completing the training, delegates receive an NQF Level 2 certificate for the brickwork com- ponent of the community house building qualification. This includes health and safety in the workplace, excavating, setting out the site, cast- Cornubia affordable estate on KwaZulu-Natal’s north coast embraces partnerships across various spheres of government and the private sector.

another skill, such as plumbing, so that eventually they can become fully fledged contractors.” Gumede says that the idea is to bring together as many property value chain partners such as the con- tractors, lot purchasers, tenants and occupiers, training providers and gov- ernment by pooling resources, both financial and non-financial. He adds that the founding part- ners of the SSIP project in Cornubia includes the national and KwaZu- lu-Natal Departments of Human Settlements providing housing; the eThekwini Municipality which offers skills development, placement, busi- ness support and social services; and Tongaat Hulett Developments, which contributes to various SSIP elements. “This initiative is a fine example of a public private sector partnership that is helping to achieve govern- ment’s skills development objectives and provide employment,” said Beryl Mphakathi, Head of eThekwini Mu- nicipality’s Department of Housing. ■

ing a concrete strip foundation and providingmasonry work on solid and hollow units. C ommu n i t y memb e r s a r e equipped with protective clothing and are now set to start their work experience with local contractors, who have been commissioned to build the affordable houses on the estate. While gainingwork experience they earn a small stipend. “Candidates are being prepared to enter into employment as brick- layers,” says Joe White, Director of Catalyx, the implementing partner of the initiative. “We are in the process of liaisingwith thedifferent housing con- tractors to finalise their placements.” “Bricklaying emerged as one of the priorities when we workshopped the different skills that were needed at the Cornubia Industrial & Business Estate (CIBE),” says Bongani Gumede, Corporate Director of Tongaat Hulett Developments. He added, “We hope that those learning bricklaying will first gain experience and then learn

June 2016

News

Masiphumelele BNG project The civils tender process for the City of Cape Town’s R50 million Masiphumelele Phase 4 Breaking New Ground housing project is currently under way.

T he first stage of the Masiphu- melele Phase 4 housing proj- ect has been earmarked for qualifying applicants living in in- formal settlements or backyards in the area. Construction of 227 fully serviced sites in the wetland area is envisioned, says Mayoral Commit- tee Member for Human Settlements, Benedicta van Minnen. A total of R50 million has been allocated for civil services and infrastructure between September 2016 and June 2017, with housing units rolling out between July 2017 and June 2018. “We are doing everything we can

to ease the acute housing need inMa- siphumelele and also in other areas across the metro. In areas such as Masiphumelele, where residents are well organised on political and civic levels, we are dependent on the sup- port and cooperation of the residents and community leadership. “Too often, our projects are de- layed because of a lack of assistance at grassroots level, for various rea- sons. This is to the detriment of our most vulnerable residents and our aim of enhancing the delivery of housing opportunities and basic ser- vices as a means of driving redress,” says van Minnen. ■ T his follows three successive hikes. Seeff says that although the better than expected April Consumer Price Index rate of 6,2% is marginally above the Reserve Bank’s target range of 6%, it is slight enough to support the decision to the keep the interest rate flat. There would have been no value in raising the interest rate right now given that the initial fears of rocketing inflationseems somewhat overstated. A rate hike does not serve the econo- my and the rate hikes have done little to deter consumer spending. Seeff adds that in a more buoyant economy, a higher interest ratewould be acceptable for a fair and balanced market. As things stand, the economy would be better served by a stable interest rate. The propertymarket could dowith a boost. While transactions are below the levels of 2014 and early part of 2015, the market nonetheless remains fairly active. “We have not yet seen the doom and gloom predicted at the start of the year, save perhaps for the mining towns. Bear in mind that therewill always be peoplewho need to buy for various reasons, relocating, downgrading and upgrading. Rising

No repo rate hike Chairman of the Seeff property group, Samue l See f f, has welcomed the decision by the Reserve Bank’s Monetary Policy Committee to retain the repo rate at 7% (the base home loan rate is at 10,5%) as a much needed boost for the economy and property market.

Samuel Seeff

interest rates and general living cost inflation is set to remain a challenge this year,” says Seeff. As the year progresses and more stock comes onto the market, sellers will face increasing pressure to price competitively. On the upside, accord- ing to the latest bank indicators, the decline in price growth seems to have halted for now. Overall, Seeff still sees a very satisfactory market. All eyes will now be on the up- coming local elections with some expected shifts of power from the rul- ing party. “This,” says Seeff, “should hopefully be a strong signal that government needs to lift its game as poor service delivery, inefficiency, waste and corruption do not support economic growth. And, without a good economy, we cannot expect a good property market.” ■

June 2016

News

DOHS under pressure The Democ rat i c A l l i ance’s Shadow Deputy Minister of Human Settlements, Tandeka Gqaba says that in July 2014, government promised to have a credible Housing Demand database that would assist municipalities in the allocation of fully subsidised state housing.

S o far this has not happened. Gqaba says, “Beneficiaries only become aware they donot have a say in the construction of their asset. We continue to treat people as passive recipients of government services. This has to change.” Provinces, such as the Free State and Northern Cape are spending as- tronomical amounts, some as high as R700 000, on repairs to a house.

“We also need to review the quali- fying income band for Breaking New Ground housing as well as Social Housing and Institutional subsidies.” A cco r d i ng t o Gqaba , mo s t municipalities have not planned for upgrades of informal settlements. Another issue includes land ac- quisition, which forms part of the Strategic Plan Priorities, and there has been nomunicipal budgeting for this. In some areas this function is not within the control of the Department Manenberg housing project of Human Settlements. According to the Department there is a backlog of 900 000 title deeds that still have to be completed. In KwaZulu-Natal the existing backlog does not reflect the backlog. It is clear that this important task is not being taken seriously. Kevin Mileham, Shadow Minister of Cooperative Governance and Tra- ditional Affairs says that the City of

Cape Town is leading themunicipality when it comes rolling out title deeds to state housing beneficiaries. Nelson Mandela Bay Metro lags behind with 50 934 outstanding title deeds, and Johannesburg has over 220 000 home owners waiting for title deeds as the land still has to be approved as a townshipbefore the title deedprocess can be concluded. ■ fencing has been provided for. “In addition, we are engaging with local leaders in the area in an attempt to mobilise the community behind the project.” Van Minnen says that a unique feature of this project is the mural initiative. Unemployed young people are participating in mosaic art train- ing, which is currently underway. “The four-month training project aims to provide unemployed youth with an opportunity to learn a skill so that they can create opportunities for themselves.” The large-scale murals will be displayed on buildings and houses that look onto Govan Mbeki Drive. The murals will celebrate Manen- berg’s heritage. ■

T he City of Cape Town’s

being rolled out. The all-women project steering committee will oversee the construction of 587 subsidised units. The project is due for completion by 2019. According to the city’s Mayoral Committee Member for Human Set- tlements, Benedicta van Minnen, “This area is incredibly volatile, largely as a result of the high levels of gangsterism and drug-related crime. It is therefore not a simple task of building subsidised units. “We are fully aware that we will face some uphill battles in this area.” She adds that additional safety measures will be put in place, includ- ing the employment of a local neigh- bourhoodwatch. In an effort to secure the site, the erection of perimeter

R120 million Manenberg infill housing project is currently

June 2016

News

Sectionals in Hout Bay The Hout Bay development market is abuzz with activity and a new sectional title project launched by developer Farrelli Properties.

R iverside Square, a 63 unit development, will offer 12 bachelor units, 24 one bed- room units, and 27 two bedroom apartments. The four-storey develop- ment units range in size from 41 m² to 90 m², says Cathy Cockcroft from IHPC estate agency. All the apartments will have open plan kitchens with under-counter ovens, electric hobs, extractor fans, plumbing for dishwashers or washing machines, and built in cupboards in the bedrooms. In addition to the quality work- manship, it will offer residents life- style extras such as an outdoor swimming pool, 24 hour security, a communal laundry facility and se- cure undercover parking. There will also be extra storage space available

bus service. Security has been made a priority by the developers and includes state-of-the-art intercom systems, biometric access, electrified perimeter fencing, CCTV camera sur- veillance and 24-hour guard services with an on-site duty manager. The units have been designed to be light, airy and modern, maximising moun- tain and wetland views. ■

for purchase or hire. Construction is due for completion in the first quarter of 2017. Located on Riverside Square, Empire Avenue, on the banks of the Disa River, the development offers views of the Hout Bay valley as well as the surrounding mountains. It is within walking distance of Hout Bay beach and five minutes from retail centres, schools, as well as the MyCiti

BUILDING for good

New Water Reservoir Will Save Millions

Basil Read, in collaboration with GIBB Engineering and Architecture and the Government, has built an innovative water supply and distribution system that now services its Savanna City development. The aim of the new system is to limit water losses by 10%, which equates to an approximate saving of R11 million per annum. The centrepiece of this ground-breaking initiative is a new, purpose-built R37.3 million reservoir that holds 10 million litres of water. Constructed using ‘self-healing’ concrete that automatically expands to fill in any cracks that may develop. This new water supply has a distribution system which is divided into manageable zones incorporating a series of pressure reducing valves, which make leak detection and repairs much more efficient. The material used for the pipes was also carefully chosen for its strength and durability. All in all, the new Savanna City reservoir is an outstanding example of Basil Read’s commitment to the sustainable use of our precious natural resources. By combining local insight with the best international technology available, Savanna City is leading the way in creating innovative urban planning solutions for the future. Visit our website www.savannacity.co.za for more information.

Solid ground for starting your future and building it for good

TEL: 010 010 5316 www.savannacity.co.za

News

A ccording to Manie Annandale, Head of Affordable Housing Development Finance, Nedbank Corporate and Investment Banking (NCIB), “The establishment of social housing can act as a catalyst to aid economic development and growth. By bringing affordable, central hous- ing to this sector of the population, social housing empowers its tenants to live and work in more centrally located hubs, rather than having to commute towork fromthe outskirts of an urban area.” He points out that this in turn tends to increase the lifestyle Housing The recent launch of the Belhar Social Housing Project in the Western Cape showcases the role that Public Private Partnerships (PPPs) can play in facilitating the provision of social housing, which provides housing solutions. Belhar Social

Madulammoho Housing Association (MHA), are one of six fully accredited social housing institutions with the SHRA. The project will roll out over 600 sectional title units for rent in Bel- har’s CBD. Funding will come from the SHRA’s Social Housing Restructuring Capital Grant, contributions from the Western Cape Provincial Government and bond finance from Nedbank CIB. It is located on the corner of Sym- phony Way and Carmen End, Belhar, and is in close proximity to the Uni- versity of the Western Cape and the Cape Peninsula University of Tech- nology. Nearby amenities include an indoor sports complex, two railway stations, taxi ranks, schools, library, clinic and retail stores. With over 35% of the population in dire need of the assistance offered by social housing, this development adds significantly to Nedbank’s portfolio of social housing. In 2013, government allocated R4 billion toward social housing devel- opment subsidies allocated through the Social Housing Investment Pro- gramme, which is run by the SHRA. Spread over five years, this represents significant funding opportunities for commercial banks, due to the strict controls imposedondevelopers by the SHRA that minimise the lending risks. Nedbank CIB spent time working with authorities such as the SHRA and Finmark Trust’s Centre for Affordable Housing Finance in Africa to assess viable frameworks and a strategy for funding social housing investment. “Nedbank will continue to play a piv- otal role in funding developments by reputable developers with a robust rental management policy in place,” concludes Annandale. ■

stability in an individual’s life, with a subsequent positive ripple effect on communities and ultimately, the economy. Annandale says it is particularly im- portant during tough economic times to ensure the ongoing operational viability of social housing. “In this re- gard, the collaborative businessmodel offered by a PPP is highly recommend- ed. The Belhar Social Housing Project is a PPP between Nedbank, the Social Housing Regulatory Authority (SHRA) and the Western Cape Government.” Developers of the project, the

T he City of Cape Town’s next phase of the R200 million Imiza- mo Yethu housing project is set to get underway with bulk earthworks in the steep mountainous terrain. The Imizamo Yethu project is located on former forestry land between Imizamo Yethu and Hout Bay Main Road. May- oral Committee Member for Human Settlements, Benedicta van Minnen, Imizamo Yethu housing project says, “The challenging landscape, with its steep slopes and parts of the site reaching into themountainous terrain, has been an obstacle that we have had to overcome. It has been quite a tough journey to get to this stage but our commitment to improving the living conditions of the people of Imizamo Yethu has kept us going.”

She adds, “We have had in-depth engagements with the community and we urge them to continue to work with us.” More than 900 housing units, comprising a mixture of subsidised houses and community residential unit apartments, will be built for quali- fying beneficiaries from the Imizamo Yethu informal settlement. The exact number could increase when the final yield becomes clearer, on completion of the detailed architectural design of the final stages. Services and top structures on the old forestry land are expected to be completed by June 2019. ■

June 2016

News

Ceiling retrofit project

T he ambitious ceiling retrofit project aims to ensure that ceilings in old state-subsidised housing projects have been insulated and weatherproofed. The majority of state-subsidised housing units were constructed without insulated ceilings andweath- erproofing during 1994 and 2005. This was because the then subsidy, which was provided by the government, did not make provision for the installa- tion of ceilings. After 2005, the standard for sub- sidised housing was improved and the housing subsidy was increased to provide ceilings, weatherproofing and partitioned bedrooms. The City of Cape Town Mayoral Committee Member for Human Settlements, Benedicta van Minnen says, “We are expecting to complete 4 500 ceilings by August. This will be to the benefit of our more vulnerable residents, especially during the cold

More than 3 600 government fully subsidised housing units have been retrofitted with ceilings by the City of Cape Town.

and wet winter months as this has health implications.” The R133 million large-scale ceil- ing retrofitting initiative includes 8 001 units in total. The city has already completed units in Eureka, Kalkfontein, Broadlands (Strand) and Lwandle, with units in Vrygrond and

Wesbank still to be completed. The second phase of the project has been earmarked to start in the second half of the year. It has been estimated that in Cape Town alone, there are approximately 40 000 state-subsidised homes that do not have ceilings. ■

Housing

T here is some uptick evident in middle-segment house price growth – according to Absa Home Loans Property Analyst, Jacques du Toit. Year-on-year growth in the average nominal value of middle-segment homes in the South African residen- tial property market showed some improvement up to April 2016. Year-on-year nominal price growth in middle-segment housing was recorded at 7,1% in April, slightly up from6,8% in March. Real price growth came to 0,5% year-on-year (y/y) in March, after some real price deflation of 0,6% y/y in February. The uptick in house price growth was driven by the segment for small housing, with the categories of medi- um-sized and large housing showing relatively stable price growth in the first four months of the year. The accelerating price growth in the small-housing segment since the end of last year are the result of the base effect of sharply declining price growth in the corresponding period a year ago. Price growth in this segment of the market may also be supported by increasing financial strain on home- Growth in house prices

to a large extent, be driven by a weak- ening exchange rate and rising food, fuel and electricity prices and further interest rate hikes in coming months. Prime lending and variable mortgage interest rates, currently 10,5%per an- num, are forecast at 11% by the end of the year. These developments will nega- tively affect household finances, with credit-risk profiles, financial vulner- ability and consumer confidence to comeunder further pressure. Thismay cause credit providers to adjust risk appetites and lending criteria. “House price growth is forecast to show a marked slowdown towards year-end. This comes on the back of trends and the outlook for the economy and household finances, with some real price deflation pro- jected as a result of expected nominal price growth and inflation trends,” du Toit concludes. ■

buyers, causing a stronger focus on affordability and buying smaller-sized properties. The average nominal value of homes in each of the middle- segment categories for April: • Small homes (80 m² - 140 m²): R951 000 • Medium-sized homes (141 m² - 220 m²): R1 268 000 • Large homes (221 m² - 400 m²): R2 008 000 Du Toit says that the residential prop- erty market is expected to reflect the increasingly tough economic condi- tions and the impact of these on con- sumers and homeowners. Economic growth is forecast at a much subdued 0,6% in 2016, with headline consumer price inflation ex- pected to increase to a level of above 7% by year-end. The upward pressure on inflationwill,

June 2016

Housing

Stable growth in household credit and mortgage balances

T he value of these credit bal- ances came to R1 495,7 billion at the end of March, and was marginally higher compared with end-February. Year-on-year growth in secured credit balances was down at the end of March, whereas growth in unsecured credit balanceswas higher over the same period. Jacques du Toit, Absa Home Loans Property Analyst, says that growth in the value of household secured credit balances (R1 126,6 billion and 75,3% of total household credit balances) was 3,8% y/y down from 4,1% y/y. Growth in household unsecured credit balances (R369,1 billion and 24,7% of total household credit bal- ances) was recorded at 7,1% y/y up from 6,9% y/y at the end of February. The value of total outstanding mortgage balances, which consist of household and corporatemortgages, increased by 6,2 % y/y to a level of R1 247,9 billion (39,3%of total private sector credit balances of R3 179 bil- lion) at end-March 2016. Corporate mortgage balances increased by 10,5% y/y to R372,6 billion at the end of March. Outstand- ing household mortgage balances showed growth of 4,5% y/y to R875,3 billion (70,1% of total mortgage bal- ances and 27,5 % of total private sector credit balances) at end-March. The valueof outstandingmortgage balances is the net result of all prop- erty transactions related tomortgage loans, including additional capital amounts paid into mortgage ac- counts and extra monthly payments above normal mortgage repayments. The outlook is for the South Af- rican economy to grow at a much subdued 0,6% in 2016, which will be the slowest growth on record since the economy emerged from the 2009 recession. Headline consumer price inflation is forecast to average just below the 7% level this year (4,6% in 2015), driven by factors such the exchange rate, food prices, fuel prices and elec- tricity tariffs. Banks’ prime lending and variablemortgage interest rates, currently at 10,5% per annum, are projected to rise further to 11% per annum by the end of the year on the back of inflationary pressures.

Growth in outstanding credit balances in the South African household sector was relatively stable at a level of 4,6% year-on-year (y/y) at the end of the first quarter of 2016.

Against this background consumers are to experience increased finan- cial strain, which will impact their credit-risk profiles, financial vulner- ability and levels of confidence.

These trends, together with credit providers’ continued focus on risk ap- petite and lending criteria, will cause growth in household credit extension to remain relatively low. ■

June 2016

Housing

Bongani Baloyi at Savanna City

midvaal attracts investment

I n his State Of the Municipality address Baloyi said, “We met 92% of performance targets in the 2014/2015 financial year, and arewell on track with the current financial year. In 2011, we promised to reduce poverty through creating growth and jobs.” Midvaal has a 70,5% economi- cally active population, and currently has the lowest unemployment rate in the province. Over the past few years, the people of Midvaal have seen the growth and development occurring along the R59, and other

Executive Mayor of Midvaal, Bongani Baloyi, says that despite real economic challenges faced at a national level, Midvaal continues to provide the best quality of services available.

hubs within Midvaal, with compa- nies such as Heineken, Paramount Trailers, New Hope, BSI Steel and Twin Boats establishing and grow- ing their businesses within the mu- nicipality. “Sedibeng Brewery, a R3,5 billion investment, created 3 500 construction jobs and is currently looking to expand its supply chain locally, through purchasing barley

from 32 local farmers. The Ferrero Factory in Walkerville employs over 200 people, and Paramount Trailers has expanded its operations mas- sively in the past five years, currently employing 300 people.” The combination of good gover- nance and proper management of public funds has increased investor confidence into the area, attracting more than R10 billion in investment. Baloyi says that Midvaal has actively pursued investment by hosting a range of international delegations, from China, USA and Kenya, as part of its strategy to showcase Midvaal as the ideal investment hub. “Availability of the correct infra- structure also plays a key role in the ability of a municipality to attract potential investors. The expansion of the MeyertonWaste Water Treatment Works will increase the capacity of the plant from 10 mega litres per day to 25 mega litres per day, which sub- stantially increases the capacity of the municipality to facilitate develop- ment for the next 15 to 20 years,”

June 2016

Housing

notes Baloyi. “In attracting growth and investment, we have made progress. Over the past three years, we have also placed a strong em- phasis on our agricultural strategy in Midvaal, sharing the vision of an agri- tropolis. We appointed a service pro- vider to provide an overall Turnkey Management Solution for Midvaal, which includes: Market Feasibility Study; Monitoring, coordination and facilitation of stakeholder consulta- tion; Community Engagement; Facili- tation of training for capacity build- ing, skills development and technical production; Financial management and marketing programme. “From 2011 until 2015, we spent R19 million in Sicelo and R 23 million in Lakeside on capital projects, as well as an additional R7 million for gravel to tar programmes in these ar- eas. Over R50 million has been spent on general projects in disadvantaged ‘We have provided world class facilities of the highest standard.’

areas.” Almost 1 000 housing benefi- ciaries in Sicelo have already received title deeds. This is an ongoing process in Lakeside. The municipality built a sports stadium, outdoor gym as well as a community hall and library in Sicelo. In Lakeside, a new sports field has already been planned and construction of the Mamello housing project will start shortly. Baloyi is proudof Midvaal’s accom- plishments, “What is important is that we have not simply provided a small, standard, tick-the-box type of facility in these areas – we have provided world class facilities of the highest standard. We are also building RDP houses on prime land overlooking the Vaal Marina dam, which would once have been the preserve of the rich.” Midvaal, like other municipalities, has an obligation to support and promote the development of the youth within its municipal jurisdic- tion through programmes that are aimed at: Skills development and training; Entrepreneurship; Business development; Support for coop- eratives and Small Micro Medium

Enterprises; Support for graduates who can’t find employment. Baloyi concludes: “The Kgatelopele initiative involves identifying

250 young people in Mid- vaal, and providing them with training and skills in business development and entrepreneurship, with the vision that they will cre- ate employment for them- selves and their peers. “As a catalyst in the process, the municipality will provide training in service deliv- ery sectors such as grass- cutting, fixing water leaks or filling potholes. These young people will then form cooperatives, which can provide the services which they were trained in as a starting point. The municipality has identified almost R7 million worth of job opportunities within service delivery that can be accessed by the youth cooperatives.” ■

June 2016

Housing

Major metro property barometer ©Chris Kirchhoff, MediaClubSouthAfrica.com Major Metro Former Township House prices are estimated to be rising faster than houses in the former suburban markets, and remain the most affordable in the housing market.

T he First National Bank Major Metro Former Township House Price Index continues tooutper- form the overall Major Metro House Price Index in terms of average price growth. These township areas remain the most affordable residential areas on average. The former Black Township Areas saw their house price inflation rate continue to exceed that of the overall Major MetropolitanRegions in the first quarter of 2015. The higher average house price growth of the townships in recent times appears to reflect greater resi- dential supply constraints relative to demand, comparedwith formerwhite suburban areas. “The township markets do appear to be ‘late-comers’ to property cycles, and also appear to be more cyclical than the higher priced markets. They experience higher price inflation peaks and lower troughs,” says John Loos, Housing and Property Sector Strategist Market Analytics and Sce- nario Forecasting Unit at FNB Home Loans. The FNB House Price Index for ar- eas formerly classified as Black Town- ships in the six Major Metro regions, rose by 11,9%year-on-year in the first quarter of 2016. This is slightly higher than the revised 11,8% price growth rate of the prior quarter, and remains well above the overall Major Metro RegionsHousePrice Index (Ethekwini, Cape Town, Nelson Mandela Bay, Ekurhuleni, Joburg and Tshwane) growth rate of 4,5%. The former townships, however,

remain, on average, the most af- fordable areas of the market, with an average estimated house price of R356 390. “We do believe that much of this outperformance by the former town- ships in terms of house price growth is merely a typical lag behind the higher end of the market.” He says, “Lower income com- munities are sensitive to interest rate moves and economic cycles, and rising interest rates and slowing economic growth should ultimately take their toll on township residen- tial demand. Indeed, we have seen transaction volumes here begin to slow recently. However, 2015 was a good year overall in terms of transac- tion growth in townshipmarkets, and we believe that that volume growth, coupled with perceived supply side constraints, is still feeding into year- on-year township house price infla- tion with a lag.” The lag, says Loos, may be largely due to a relative affordability search in the market as Household Dispos- able Income growth comes under pressure. It may also have to do with lower income earners taking longer to make what is a big buying decision. This causes townshipmarkets topeak later than others. Lower income groups are highly credit dependent, and often work in more cyclical sectors in larger

numbers, such as manufacturing. The township market also appears to be noticeably more cyclical/volatile than the pricey suburban markets over time, with higher house price growthpeaks and lower troughs, such as the -16,1%year-on-year drop in the second quarter of 2009. Have former Township markets outperformed the suburbs over the longer term. Price inflation-wise, cumulatively since the first quarter of 1999, it would appear not. With 537% cumulative inflation since the first quarter of 1999, major metro house price inflation outstrips the 427% cumulative inflation for the Township Index. Township markets are associ- atedwith long commutes to places of work and many of the upwardly mo- bile people from the townships often migrate to the former white suburbs, nearer to places of work and nearer to a variety of amenities. Loos says, “Until Townships be- come more significantly mixed use, creating more economic activity and employment opportunities, they are probably destined to remain themost affordablehousing regionswhere resi- dents spend a high portion of income on commuter transport. This remains one of SouthAfrican cities , major chal- lenges, i.e. to plan cities , in such away that we take far more of the economy to the former townships, lowering low income transport costs.” ■

June 2016

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June 2016

Housing

Village of Hope

T he Village of Hope 20 850 m² building and construction method incorporates recycled polystyrene and is based on the suc- cessful LIV Village, founded by Tich and Joan Smith in KwaZulu-Natal in 2001. The project is a partnership be- tween the Polystyrene Packaging Council (PSPC) and the Mobile Edu- cation and Training Trust (METT), a non-profit organisation, Like the LIV Village, the Village of Hope will provide a home for orphaned and vulnerable children who will be placed in a family envi- ronment, with trained foster mothers, school education – a place where all their physical needs are met,” says Hennie Snyman of METT. Adri Spangenberg of the Polystyrene Packaging Council explains: “The pilot programme in- cludes the use of polystyrene, which has been treated with a patented chemical cocktail that neutralises bacteria. Building with recycled polystyrene offers government a much needed solution for the low cost housing market, as well as the polystyrene recycling industry. It suc- cessfully uses and includes coloured and black contaminated polystyrene, which is found in foodpackaging such as fast food trays, take-away cups, meat and fresh fruit. Snyman and his

The new R285 million Village of Hope is situated on 285 ha of land overlooking the beautiful Hartebeespoort Dam in Kosmos, North West Province.

team developed a new globally pat- ented mixture containing all grades and colours of recycled polystyrene, combined with nine different chemi- cals and cement. The PSPC plays a vital role be- tween end-users of recycled polysty- rene and waste management com-

cement and concrete, but also cuts the overall building cost by up to 40%,” says Snyman. The various elements are mixed, poured into slabs and left for seven days to dry before the lightweight, strong and solidwall structure is rock hard and ready for use. METT is proud to deliver documented proof of the tests ranging fromstructural and load impact tests, to rain penetration resistance and the so-called ‘knock test’ to hear if the walls have a hollow sound. In each test, the product far exceeded the building standard requirements. “Fire rating is obviously a very important consideration for low cost housing in South Africa. During a recent four and a half hour burn test in a furnace of 1 800 degrees Celsius, the fire only penetrated 1 cm into the walls, giving it one of the best fire rat- ings in the world. The South African Bureau of Standards, the Council for Scientific and Industrial Research and various international agencies have also tested the product, and it came through with flying colours

‘Building with recycled polystyrene offers government a much needed affordable solution for the low cost housing market. ’

panies to ensure a continued supply of material will keep up with the de- mand. Each week large quantities of polystyrene are delivered to the site for recycling, primarily by growers, nurseries and plant centres located in Brits and surrounding areas as far afield as Pretoria, who use expanded polystyrene for their seedling trays. “It takes 720 kg of recycled poly- styrene to build a build a 68 m² house. Last year, we recycled more than 613 tons of polystyrene. Our solid wall system reduces the use of

June 2016

Housing

‘It takes 720 kg of recycled polystyrene to build a 68 m² house. This system reduces the use of cement and concrete and cuts the overall building cost by up to 40 %.’ every time,” says Snyman. As a result, METT has been appointed as the pre- ferred supplier to government after officials visited the site of the new Village of Hope to see first-hand the buildingmethod. Construction plans are currently underway to build four factories in each province. This will ensure that 68% of all schools, clin- ics and houses built by 2018 will use recycled materials. Snyman adds that the design of the first 32m² house has already been approved and costs R28 000. “This is an affordable construction option that enables government to provide the poorest of the poor with houses. However, thismethod of construction can be used across the residential sector. We were recently providing material for a 1 600m² designer home in Bela-Bela, as well as triple storey designer homes in the Fourways area, north of Sandton.” The Village of Hope will accom- modate 1 000 orphans from the NorthWest province when it officially opens in January 2017. The home will provide long term foster care, giving children a sense of belonging in a homely environment andmodel- ling the project on an African village lifestyle. “The houses will be built in clusters surrounding a communal

play area. Each home will have a fully trained house mother, who will be responsible for looking after up to six children through the Department of Social Welfare.” Once completed, the project will consist of a fully equipped nursery school, early childhood develop- ment centre, primary school, high school and various on the job training facilities for agriculture. Other build- ings on the site include an outreach clinic, internet café, safe haven for abused women and children, and a satellite police station. It will also include sporting grounds, 10 ha gar- dens designed by leading landscape architects and a special agricultural training centre for emerging black farmers. All of these facilities are currently being constructed or fin- ished off. Long termplans for the Village are enough tomake a person’s head spin

as Snyman lists an impressive array of corporates who have taken on the Village of Hope as a Corporate Social Investment project. “These will be flagship projects and will be replicated around the country. Our aim is to ensure that we are completely self-reliant aswe grow our own food to feed the children, educate them, and later on equip them with skills that will allow them to secure jobs in the future”. Snyman concludes: “It is clear that composite products offer a solution for housing and social needs in our country. It addresses the concept of green building by usingmaterial from the waste stream and reduces land- fills. It also increases job opportuni- ties for communities and provides affordable construction costs. We are excited about the tremendous progress that has been made in the construction of the Village of Hope.” ■

June 2016

Energy Efficiency

Eskom and CSIR team up

T he partnership seeks to syner- gise the research capabilities of the two organisations in support of Eskom’s strategic and op- erational needs. The overall account- ability to manage the agreement will reside within Eskom’s Research, Test- ing and Development business unit. Speaking at the signing of the five year agreement, Eskom Group Chief Executive, Brian Molefe, says that the partnership will strengthen the relationship between the CSIR and Eskom. “The partnership will further strengthen our collaborative rela- tionship and, accordingly, provides a long term platform to perform scientific and operational research and evaluation tasks towards the realisation of Eskom’s strategic and operational needs.” He added that Eskomwill prioritise projects to ensure operational and financial sustainability, as well as refurbish current plants to provide electricity on new infrastructure projects. CSIR Chief Executive Officer Sibusiso Sibisi says that energy is one of the CSIR’s area , s of focus. “Together Eskomand the CSIR can come up with innovative solutions for current and future energy issues, determine what the new electricity system will look like and what the plans and responses should be that need to be put in place to build the T ransport Minister Dipuo Peters says that the construction of the solar plant took 24 weeks to complete. “The R13 million solar plant is in line with government’s developmental imperatives, energy security priorities and environmen- tal conservation obligations,” said Peters. The solar farm, which is located on 0,7 hectares of landwithin the airport precinct, uses an 11 kV substation as it its main source of supply, which is located at the airport. “Rigorous practical training and skills transfer to operate and main- tain the Solar Photovoltaic (PV) plant was conducted, which included cleaning modules, replacing mal- functioning electrical components and monitoring performance of PV plant, amongst other technical skills,”

Eskom and the Council for Scientific and Industrial Research (CSIR) have signed a partnership that is aimed at aligning and enhancing interaction between the two bodies in support of national goals.

future South African energy system,” says Sibisi. Eskom has identified three im- peratives that have been expanded to identify newand existing technolo- gies and capabilities that can address specific challenges. The organisa- tions will work together on extending the transmission components’ lifes- pan through predictivemaintenance; real-time grid monitoring using the Advanced Fire Information System and laser-based refurbishment of high-value components, among others. This also includes safely deliver- ing on the new build programme and capacity management. Re- search and development will focus

on the reduction of water consump- tion; development of advanced emission control technologies; the development of components for use in advanced high-temperature gas reactors andmodelling of associated technologies. Aspects to be jointly investigated include security risk management solutions, to prevent theftand safeguardhigh-value assets; cable and infrastructure theft detec- tion and prevention. In the long term, Eskom is also facing significant challenges from fundamental shifts in the electricity and energy system. This includes an increasing contribution of renewable technologies as well as the future focus on new build. ■

TheAirports CompanySouthAfrica (ACSA) recently launched its second solar power plant at the Kimberley Airport, in the Northern Cape. Solar power plant launched in Kimberley

and report environmental issues at its nine airports. The completion of the solar power plant at Kimberley Airport forms part of ACSA’s broader plan to install solar energy plants at all six regional airports over the next three to five years tomake themmore self-sufficient,” concluded Peters. ■

says Peters. The Kimberley Airport Solar Plant will utilise Solar PV. It is the second regional airport in South Africa to be powered through solar energy, with the first being theGeorge Airport Solar Plant, which opened in February 2016. “ACSA has a statutory responsibility to manage, mitigate

June 2016