The Financial Services Sector Charter committed South Africa's top four banks, Absa, FNB, Standard and Nedbank, to a R42-billion funding effort to address the current need for low-income housing by the end of 2008.
About R20-billion of that money has reportedly already been set aside, with each of the banks striving for ways in which to find investment avenues for these outlays.
This initiative could have a positive impact on the whole of South Africa.
But Paddy Herbert, marketing director of Propell Finance Solutions, the largest sectional title management and levy collection company in South Africa, said at least 30 percent of the funding would end up in sectional title schemes - and this, he warned, could present difficulties.
"Banks are likely to experience problems in finding zoned land and getting municipal approvals for these low-income projects," Herbert said.
"It is widely recognised that there is huge shortage of appropriate land.
"One answer to this problem is to opt for densification in the form of low or high-rise sectional title block. It has been shown time and again that these are the least expensive form of residential development," he said.