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Understanding Financing and Other Decisions of Residential Small-Scale and Micro Developers: The Case of South Africa

Author

Listed:
  • Francois Viruly
  • Carsten Lausberg
  • Björn-Martin Kurzrock
  • Max Hammer
  • Dayni Sanderson

Abstract

There is growing evidence that small–scale developers play an active role in delivering affordable housing units in South Africa. Small-scale developers tend to focus on backyard developments, and opportunities on land released by different tiers of government. The success and growth of these private sector-led projects are, however, constrained by the availability of finance and the structure of financial products offered to the market. While financing for end-users is increasingly being addressed, developer finance seems to have received less attention. This research aims to provide an understanding of the role of development finance in the decisions made by small-scale developers in South Africa. The research conclusions are derived from an analysis of the international literature and several open-ended interviews undertaken with market specialists and small- scale developers in South Africa. It suggests that development housing finance instruments should be based on a deep understanding of the decision-making characteristics of small-scale developers in the affordable housing market.

Suggested Citation

  • Francois Viruly & Carsten Lausberg & Björn-Martin Kurzrock & Max Hammer & Dayni Sanderson, 2024. "Understanding Financing and Other Decisions of Residential Small-Scale and Micro Developers: The Case of South Africa," AfRES afres2024-011, African Real Estate Society (AfRES).
    • Handle: RePEc:afr:wpaper:afres2024-011
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    More about this item

    Keywords

    Decision-making; housing development; Housing Finance; Housing Markets; South Africa;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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