Scheme still attractive: BSP

By DALE LUMA
HIGH property costs and limited availability of land is a challenge for first home buyers in the country, according to Bank South Pacific Financial Group Ltd (BSP).
Group chief executive officer Robin Fleming said in spite of this interest in the bank’s first home owners loan scheme from the public was still growing.
Fleming said the bank had funded well over K420 million since 2014 through the loan product since its inception.
“Since its inception in 2014, the BSP First Home Ownership Scheme (BSPFHOS) Loan has assisted 1,260 first home buyers,” Fleming said.
“The total value of loan funded is well over K420 million to date.
“Interest from potential first home buyers continues to grow however, rising house prices and scarcity of land for development remain a challenge for many first home buyers.”
Property Developers Association board member David Kitchnoge said there were two main elements to housing prices.
“First is the construction cost which comprises of land development cost plus the cost of building the house itself,” Kitchnoge told The National.
“Land development cost entails civil works to clear the topography and may include things like flattening hills, backfilling, etc… depending on the contours in the locality.
“It also entails installation of baseline infrastructure such as roads, water and sewerage lines and power lines.”
He said all these costs added up and were significant.
“Over lay that with the cost of building the house and the total cost of a land and house package go up into the hundreds of thousands of kina.”
He said one way to address the cost was to build high density dwellings such as apartments to increase the yield per square metre of land used.
“You decrease the unit cost by putting more dwellings on for the same land development cost.”
Kitchnoge said the passing of Strata Title law in Parliament last week would enable developers to build high density dwellings and sell each portion individually.