select
|

Standard Bank reports high demand for affordable housing

Standard Bank has made significant inroads into the affordable housing market since its entrance five years ago and now finances one in three properties in this market.




The bank's affordable housing loan book grew 30 percent last year to a record R14 billion.

Nicholas Nkosi, the head of affordable housing at Standard Bank, said yesterday that the bank's experience was also an indication that demand in this segment of the housing market had remained resilient despite weak economic conditions.


"There is still high demand for affordable housing. Standard Bank also expects to attract more prospective home buyers who are seeking to move out of the rental market and become home owners," he said.


Nkosi said Standard Bank was quite comfortable with the performance of its affordable housing loan book but declined to provide any information about the percentage of mortgage bonds in arrears or the percentage of foreclosures in the past year.


"We have not seen any different trends from our normal [home loan] book. That speaks to the affordable housing market and people in this market prioritising their bond repayments," he said.

Nkosi added that repayment arrears and foreclosures were primarily caused by "life events", with something happening that led to the homeowner being unable to pay their bonds.


He said the price range of affordable housing financed by Standard Bank was homes between a minimum of R100 000 and R550 000 that were sold to households with a monthly income of up to R18 000.


Thabani Ndwandwe, the head of credit management for inclusive banking at Standard Bank, said more than R2bn or almost 80 percent of the loans granted last year were disbursed to first-time buyers.


Ndwandwe said the income band distribution of the loans granted showed it was not just financing the upper end of the affordable housing market but continued to increase access to home ownership for customers in the low-income segment.


Nkosi said Standard Bank had in the past five years helped more than 80 000 customers to buy homes in the affordable housing category.


He said the average size loan granted by Standard Bank was R350 000 and increasingly more people were putting down deposits when they purchased a home, which dispelled some of the notions about consumers not saving.


Nkosi attributed the strong growth in its affordable housing loan book to it having a very targeted affordable housing strategy and the strength of this market but he stressed that Standard Bank continued to be the country's largest residential mortgage lender and its overall loan book continued to grow last year.


He said the Basel 3 regulatory capital requirements on banks were being introduced in a phased basis with some already in effect, which would result in increased interest rates on loans.

But Nkosi did not anticipate a material change in the interest rates payable on loans into the affordable housing market.


(Business Report)




  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK