FNB continues to enhance access to affordable housing for low—to middle-income South Africans despite rising property prices and economic challenges.
The bank aims to address the country’s significant housing shortage and promote homeownership across diverse communities through strategic partnerships, tailored financial solutions, and technology-driven processes.
According to the Department of Human Settlements’ White Paper on Land and Fixed Matters 2024, over 3.4 million South Africans remain on the housing needs register, highlighting a persistent backlog. In response, industry bodies such as the Banking Association of South Africa (BASA) are collaborating with financial institutions to foster economic participation and improve financial literacy.
FNB views homeownership as a cornerstone of improved living standards, financial security, and generational wealth creation. Its focused strategy on assisting low-income households in both primary and secondary markets has resulted in an affordable housing book of R21.9 billion as of June 30, 2024, supporting 69,429 low-income households. The initiative targets households earning up to R32,000 per month, reinforcing FNB’s commitment to making homeownership accessible.
Despite challenges posed by low economic growth, high living costs, and rising construction expenses, recent interest rate cuts have bolstered confidence in homeownership, particularly among low-income earners. Government subsidies are now integrated into FNB’s affordable housing lending processes to improve affordability, while ongoing urbanization is expected to drive demand and influence property pricing.
FNB remains committed to collaborative efforts with property developers, city councils, and fintech firms to create sustainable housing solutions. One key initiative, First Home Finance (FHF), provides crucial financial support to customers in need. In 2024, FNB facilitated over R1.1 billion in housing finance, leveraging R76 million from FHF to fund 1,075 homes. However, awareness of this opportunity remains a challenge, prompting FNB to intensify education efforts.
Additionally, FNB offers a Collective Buying Home Loan solution, allowing up to 12 individuals to co-purchase property and share repayments. This innovative approach has proven beneficial in improving affordability and mitigating rising interest rate pressures for aspiring homeowners.
Affordable housing initiatives such as these not only accelerate homeownership but also promote economic stability and reduce wealth inequality. Property values in the affordable segment have consistently outpaced inflation, with homes valued at R250,000 or less delivering over 12% returns in the first half of 2024. Anticipated interest rate cuts should further boost property demand in this sector.
FNB’s commitment to expanding homeownership underscores its dedication to fostering economic growth and social stability, empowering communities, and helping South Africans achieve the dream of owning a home.
