South African Banks Gradually Offering More Home Loans
News Posted On: 19 June 2012
Apparently South African banks are gradually making it easier for customers to apply for mortgage loans, and are making the mortgage market more consumer friendly. One particular bank, Rawson Finance, has seen levels increase by more than 100% in the 12 months ending in May.
A number of banks have begun making 100% loans available, especially for the affordable housing market where most people are on a single income, or have a low joint income that doesn't exceed R18,000 per month.
In spite of the fact that South Africa has a huge population, access to home loans has been severely restricted and as a result mortgages are a fairly negligible percentage of GDP. In South Africa there is a massive appetite for housing, and banks are now keen to tap into this market. In contrast with other African countries, the home loan market in South Africa is one of the most sophisticated.
At the moment the recovery of the South African economy is being affected by the global economy. Economic growth forecasts for this year have been cut to 2.7%, down from 3.1% last year. This is still quite respectable, but it's possible the growth forecast may be downgraded further due to problems in Europe, as the region purchases around a third of South Africa's manufactured goods.
The expectation is that interest rates will be cut to help support growth in the economy, especially as inflation is largely under control. During the last three months the rand has declined by 9.1% against the dollar in making the market more attractive to overseas investors, but if banks do begin offering more mortgages then this window of opportunity may not last for long as prices are bound to rise.
View South Africa property for sale
Written by Les Calvert
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