BetterBond statistics shows huge transformation in real estate market

BetterBond is South Africa’s biggest mortgage originator, which represent 25% of all residential mortgage bonds being registered in the Deeds Office and include applications to and bond grants from all the major lending banks in SA.

Transformation in the SA real estate market has come a long way, with almost half of all home loan applications now being made by black buyers, compared with only about 12% a decade ago.

In the latest statistics from BetterBond this is evident that black homebuyers, including those in the affordable sector, have accounted for some between 45% and 48% of all bond applications in the past three months, compared with 43% in the same months of last year. In addition, black buyers, mostly who are also first-time buyers, now account for between 37% and 39% of home loan approvals monthly.  The overall number of home loan applications made in June was 5% up on the same month of 2011, following a 24% year-on-year increase in May.

BetterBond CEO Rudi Botha says that it is encouraging to see such an increase in the number of black buyers coming into the market and achieving bond approval especially in the light of the slowing economy and slow progress on job creation. It suggests that there is a growing appreciation of the wealth-creation potential of home ownership. It is also a reflection that consumers are regaining confidence in the real estate market, while prices which are still at low and levels are also boosting investment buying.

According to this statistics it is also a clear indication of the effect that the current shortage of good rental housing stock and rising monthly rentals are having on the market, in that more and more tenants are considering that it might now be cheaper to buy than to rent and exploring the possibility of becoming homeowners in their own right.  This trend is being increased by the current low interest rates and by improving access to bond finance, particularly for first-time buyers.

At this stage, the unstable stock markets are restoring interest in brick-and-mortar investments, and the returns to be made from well-selected rental properties are in most cases also better than one can achieve on cash in the bank.


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