A small step towards fulfilling a promise government and big banks made to low-income earners occurred on Friday when the first 200 homes were handed over to their new owners.

The ceremony at government's pilot Olievenhoutbosch housing project was attended by Absa chief executive officer Steve Booysen who committed his bank to financing 100,000 low-cost homes valued at R2,6-billion by 2010. "We will have at least one project for every province and two to three projects for every metro," Booysen said.

The big four banks in the Financial Sector Charter agreed to deliver a minimum of R42 billion for new affordable housing in the R1,700 to R8,600 income households.

So far, Standard Bank announced a R700 million development in 2004 and Nedbank says it has several projects on the go. However there is still a lack of housing for this segment of the population, said realty executives broker Bobo Khuzwayo.

"The vast majority of homes are in the upper to high-medium market. Most potential home owners can't afford the high prices currently dominating the market, and new low cost developments are not happening fast enough," he said.

Nedbank Affordable Housing divisional general manager Lindiwe Mbongwe said that there was a need for about 320,000 new homes a year, but that only 20,000 were being built.

"There are around 2-million households who don't have homes. The biggest challenge is stock availability (land and material) and issues such as rezoning, which can take up to four years and the fact the industry considers this market risky," said Mbongwe.

"The biggest demand is from people earning somewhere in the region of R2,500 a month (gross), and that income can only qualify for a bond of R140,000. Homes at that price are just not available - the easiest homes to find are in the region of R350,000 to R400,000. For those you need to earn above R8,600," Mbongwe said.

One of the few successful developments is the R1,5 billion Cosmo City which hopes to build a total of 15,000 units, with 5,000 expected to be completed by the end of this year.